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Member, Beacon International Group, Ltd.
A loss for the workers compensation claimants that sued Sedgwick and Coca-Cola alleging violation of the federal racketeering law may be a win for other claimants.
I am referring to the federal appeals court ruling this week that said federal RICO lawsuits are not appropriate for workers comp claimants disputing claims decisions.
The court defended states' rights to adjudicate claims over allowing a federal forum to decide them.
It's a big win for insurers and employers, not just for Sedgwick Claims Management Services Inc. and Coca-Cola.
A brief Business Insurance story on the court ruling is available here.
But an interesting aside: Had the court ruled that RICO lawsuits are appropriate for settling claims disputes then insurers and employers would have gained the ability to wield RICO lawsuits against injured employees seeking workers comp benefits.
The court majority said so in one sentence buried on page 17 of its ruling.
“Moreover, there is nothing preventing an employer from turning this theory on its ear and accusing employees of a pattern of mail or wire fraud designed to support benefits claims,” the court said.