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Sixth Circuit Reverses Dismissal of RICO Complaint

Posted in Recent Cases

In Jackson v. Segwick Claims Management Servs., Inc., the Sixth Circuit reversed the dismissal of a RICO complaint brought by former Coca-Cola employees.  The employees claimed work-related injuries, but alleged that Coca-Cola’s third party administrator engaged in a fraudulent scheme of denying the claims through the use of a particular doctor.

The Court determined that a number of issues were resolved by the intervening authority of Brown v. Cassens Transport Co., 675 F.3d 946 (6th Cir. 2012), which held that the Supremacy Clause preempted Michigan’s attempt to eliminate a RICO remedy by declaring that its workers compensation scheme to be exclusive of federal remedies. The Sixth Circuit accordingly made short work of those types of arguments raised by defendants to support dismissal.  Similarly, the Court held that Brown determined that the claims at issue in the case were ripe because the employees acquire a property interest in worker’s comp when the employer learns of their injuries. However, on this point, the Sixth Circuit acknowledged a circuit split with the Second Circuit, but noted it was bound by Brown.

Judge Moore authored the Court’s opinion, and Chief Judge Batchelder concurred, writing separately to question the wisdom of Brown: “I must accept the outcome of today’s decision, but I cannot agree that it is correct.” RICO, according to Chief Judge Batchelder, was simply not meant to cover these types of claims. In light of this concurrence, this case may receive some attention at the en banc stage.