Even RICO has its limits:  “If Congress intended to recalibrate state and federal power in an area that has traditionally been the province of state government by placing federal courts in the position of reviewing a state agency’s handling of charges of impropriety by parties appearing in front of it, we would expect a clear statement of Congress’s intent to achieve such a result.” 

Yesterday, in an en banc decision authored by Judge Gibbons, the Court applied a clear statement rule of statutory construction to the federal RICO statute—a statute sometimes given broad interpretation.  RICO creates a cause of action in federal district court for those who suffer injury to their “business or property” in violation of the statute.  Plaintiffs alleged that defendants—in violation of the statute—obstructed their efforts to recover for personal injuries under Michigan’s workers’ compensation scheme.  The en banc Court held that this did not constitute an injury to the plaintiff’s “business or property,” and thus was not compensable under RICO.  Five judges dissented in an opinion authored by Judge Moore.

Disagreement stemmed from the fact that it is possible to view the underlying claims in two distinct parts:  the first being an initial personal injury that gives rise to a claim for workers’ compensation under the state statutory scheme and the second being the resulting legal entitlement to workers’ compensation conferred by that statutory scheme.  The dissent argued that Michigan created a legal entitlement for workers’ compensation and that this legal entitlement was “property” to suffice RICO.  The Court, however, emphasized “the underlying reality that an award of benefits under a workers’ compensation system and any dispute over those benefits are inextricably intertwined with a personal injury giving rise to the benefits.”  And personal injury is not an injury to “business or property.” To allow a cause of action under RICO would supplant the state scheme and “mak[e] federal courts an alternative forum for workers’ compensation disputes”—traditionally a state domain.  Judge Clay concurred in the judgment, finding much of the dissent persuasive but ultimately disagreeing with the dissent’s argument that “the clear statement rule is . . . confined to a few limited contexts.”

The Court took great pains to clarify that this decision was not about the supremacy of federal power or even the scope of federal power, but rather the presumption of its exercise.  As a rule of statutory construction, “we would expect Congress to give a clear statement of its intent to intervene in Michigan’s administrative system for handling workers’ compensation claims.”