TNSIA News

Members of the National Council of Self-Insurers:

Judgment -The court of Federal Judge Paul Borman has dismissed the case of Brown v. Cassens Transport Company, stating that the exclusive remedy for the claim falls within the exclusive administrative scheme set forth in the Michigan Workers’ Disability Compensation Act. The dismissal forecloses the employees claim under the Racketeer Influenced and Corrupt Organizations Act (RICO).

The National Council of Self-Insurers, along with the Michiganand Illinois Self-Insurers Associations, filed an Amicus brief with the U.S. Supreme Court in support of Cassens.

History – In October 2008, the U.S. Court of Appeals (Sixth Circuit) ruled that six employees of Cassens Transport could proceed with their RICO suit, alleging that Cassens, its TPA and a doctor, engaged in an illegal scheme to deny the employees benefits for workplace injuries. Cassens subsequently petitioned the U.S. Supreme Court to review the decision of the Court of Appeals.

The National Council of Self-Insurers, Michiganand Illinois Self-Insurers Associations filed their amicus brief, stating to the Supreme Court that if the Appellate decision holds, employees, who say they are injured at work, will be able to prosecute RICO actions in state and federal courts as well as actions in workers’ compensation courts.

In September 2009, the Supreme Court denied Cassens’ Certiori Petition., allowing the case to resume.

The case was assigned to the court of Federal Judge Paul Borman, who had the responsibility to determine if certain medical evidence had relevance in his Court in the denial of workers’ compensation benefits.

On September 27, 2010, Judge Borman ruled that that the Plaintiffs’ exclusive remedy for their claim, that they were fraudulently denied benefits under the Michigan Workers’ Disability Compensation Act (WDCA), lies within the exclusive administrative scheme set forth in the WDCA. The judge further concluded that even assuming such a claim could be raised outside of the WDCA’s exclusive administration, the plaintiffs failed to allege an “injury to business or property” as that term is defined under RICO. The claims of the plaintiffs thus failed for this separate and independent reason.

Related Case – In Jacksonv Sedgwick Claims Management Services et al., a similar case has been instituted. It alleges that a self-insured employer, its third party administrator (TPA) and a physician conspired to deprive injured employees of their workers’ compensation benefits in violation of the RICO Act.

The National Council of Self-Insurers has filed an amicus brief in support of the employer, TPA and doctor.

Larry Holt
Executive Director