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RICO claim against TPA York Risk Services can proceed

RICO claim against TPA York Risk Services can proceed

Several Arizona fire department employees can proceed with claims that third-party administrator York Risk Services Group Inc. violated the Racketeer Influenced and Corrupt Organizations Act in settling workers compensation claims, according to a ruling from the U.S. District Court in Phoenix.

In Laurie Miller et al. v. York Risk Services Group, nine plaintiffs worked as firefighters or engineers for the Phoenix fire department, and York adjusted the department's workers comp claims, court records show. The plaintiffs alleged, in part, that York worked with the City of Phoenix to wrongfully deny or delay their workers comp benefits in violation of the federal RICO Act.

York moved to dismiss the employees' claims, saying that they were not injured in business or property, as is required under the RICO law to bring a claim, records show. York's defense was based partly on a recent en banc decision from the 6th U.S. Circuit Court of Appeals, which dismissed similar RICO claims against Sedgwick Claims Management Services Inc.

In an order issued Thursday, U.S District Court Judge John Sedwick denied York's requests to dismiss the employees' claims. Based on an analysis and preliminary order written on Dec. 9, Judge Sedwick found that the employees “possess a property right in their workers compensation benefits under Arizona law,” which allows them to have a property interest under RICO law.

While “the plaintiffs' RICO claims may have originated from personal injuries in that plaintiffs suffered personal injuries which led them to file claims for workers compensation, the harm alleged here is to the intervening legal entitlement which caused additional financial losses. Based on (previous case law), this is sufficient to raise a RICO claim,” the Dec. 9 analysis reads.