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Member, Beacon International Group, Ltd.
DETROIT—A federal judge has ruled that an attempt by a group of workers to sue their employer under federal anti-racketeering law is pre-empted by Michigan's workers compensation law's exclusive remedy.
The case, Paul Brown et al. vs. Cassens Transport Co. et al., was brought by several employees of Edwardsville, Ill.-based Cassens. The plaintiffs alleged that self-insured Cassens and its third-party administrator, Crawford & Co., used unqualified doctors to give fraudulent medical opinions supporting denial of workers comp claims. The plaintiffs filed suit alleging mail and wire fraud violations under the federal Racketeer Influenced and Corrupt Organizations Act, which allows triple recovery of damages.
Federal Judge Paul D. Boren dismissed the RICO claims in 2005, but a three-judge panel of the U.S. 6th Circuit Court of Appeals reinstated them in 2008. The Supreme Court declined to review the case, allowing it to proceed in the U.S. District Court for the Eastern District of Michigan.
On Monday, Judge Boren dismissed the case again. He said that the group's “exclusive remedy for their claim that they were fraudulently denied benefits under the (Michigan Workers' Disability Compensation Act) lies within the exclusive administrative scheme set forth in the WDCA, which forecloses their RICO claim.”
He also said that “even assuming” such a claim could be raised outside the law's exclusive remedy framework, the plaintiffs claims didn't constitute a claim covered by RICO. And, finally, even if the claim had met RICO standards, the court would have abstained from considering the claims until a final administrative decision regarding the plaintiffs' entitlement to workers comp claims had been issued, wrote Judge Boren.