UNITED STATES SUPREME COURT ALLOWS RICO CASE TO PROCEED
Last Friday, the Supreme Court of the United States reviewed the case of Cassens Transport Co., et al., Petitioners v, Paul Brown, et al., No. 08-1375 on its conference agenda. This was a Michigan case that claimed that the state workers’ compensation law did not preempt a cause of action for alleged Racketeer Influenced and Corrupt Organization Act (RICO) violations. While this claim was denied by the District Court, the 6th circuit Court of Appeals overturned the District Court and held that the plaintiffs adequately pleaded a pattern of racketeering activity. The Supreme Court of the United States has denied a writ of certiorari in this matter, upholding the ruling of the 6th Circuit Court of Appeals.
Now the matter will move back down to the District Court level where the allegation will be re-examined. This holds serious implications for Workers’ Compensation practitioners. What had previously been solely a state matter now has the potential to be transferred into the Federal court system. It will also introduce the possibility of criminal charges (conspiracy to commit fraud) into Workers’ Compensation matters. This could mean an increase in litigation costs in the years to come.
Practice Pointer: The basis of the above RICO claim is that the Insurer, TPA, and Employer conspired with certain doctors to deprive the plaintiff employees from their workers' compensation benefits. The best way to avoid such an implication is to refrain from using the same doctors in every case and to make sure that you not use doctors or other vendors with reputations which reflect obvious bias.
Warning to Plaintiff's Attorneys: This door swings both ways. If you keep using the same biased chiropractors or 100% voc experts you may have a RICO claim filed against you too!