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Trial court erred in dismissing RICO violations lawsuit brought by Coca-Cola workers

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A trial court erred in dismissing a civil lawsuit from two workers compensation claimants alleging Coca-Cola Enterprises Inc. and Sedgwick Claims Management Services Inc. violated the Racketeer Influenced and Corrupt Organizations Act, a federal appeals court ruled.

“The plaintiffs' complaint adequately states a claim for relief under RICO,” the U.S. 6th Circuit Court of Appeals ruled Friday in the case of Clifton E. Jackson v. Sedgwick Claims Management Services Inc.

The two former Coca-Cola workers, who were injured in unrelated workplace accidents, seek to represent other similarly situated persons.

They sued in 2009 in the U.S. District Court for the Eastern District of Michigan, claiming Coca-Cola's third-party administrator, Sedgwick, sought to deny paying workers comp benefits despite medical evidence strongly supporting their work-related injury claims.

They further allege Sedgwick engaged in a fraudulent scheme to avoid paying benefits to injured employees and that the TPA, Coca-Cola, and a physician hired as a “cut-off” doctor to file false medical reports violated RICO.

A district court dismissed their lawsuit, finding that RICO does not provide an end run around the exclusive remedy provided under Michigan's workers comp law. The trial court also said the plaintiffs failed to state a “recognizable” RICO claim.

The former Coca-Cola workers appealed.

In its Friday ruling, the appeals noted that since the district court dismissed the case at hand involving Coca-Cola, several issues raised in the appeal had been resolved in its finding this year in Paul Brown et al. v. Cassens Transport Co. et al.

In that ruling, the appeals court said several Michigan transportation workers could sue their former employer and third-party administrator Crawford & Co. for allegedly violating RICO after their workers comp claims were denied or settled.

The appeals court also ruled Friday that among other things the former Coca-Cola workers’ “complaint sufficiently alleges the existence of multiple people acting in concert over a period of time with the purpose of perpetuating the RICO fraud.”

It remanded the case to the lower court further proceedings consistent with its opinion.