Sixth Circuit holds employees may pursue claim that adjusters and "cut-off" doctor defrauded injury claimants

Several employees of Coca-Cola argued that their employer, its claims management company, Segwick Claims Management Services, and Dr. Paul Drouillard conspired to cut-off their workers compensation benefits without an adequate basis in law or medicine.  The first named plaintiff in the lawsuit filed was Clifton E. Jackson.  Jackson was a long-term employee who alleged that he injured his lumbar spine in 2007.  Over the next two years, three doctors confirmed the disability, including the specialist retained by Coca-Cola.  In fact, the latter specialist confirmed the disability after a second review requested by the Defendants.  At that point, Segwick sent Jackson to Drouillard, who is not a back surgeon, and got the "not disabled" response they had sought.  They cut off Jackson's benefits, forcing him to seek workers compensation benefits through the courts.

Jackson's lawyers filed a federal "RICO" claim, arguing that the Defendants used the mail to conspire to cut-off benefits to deserving employees.  They cited 8 or 9 examples of the alleged conspiracy, but the District Court dismissed the case.  It held, in essence, that they were attempted to perform an "end run" around the workers compensation system.  On appeal, the Court of Appeals disagreed. 

The higher court noted that several years earlier, the insurance industry had used the identical argument to pursue a RICO claim against alleged worker's compensation "mills" that the insurers argued were instigating and pursuing unwarranted comp claims through a conspiracy with unethical doctors.  In a "fair for the goose, fair for the gander" decision, the Sixth Circuit ruled that the exclusive remedy provision of the state workers compensation system does not pre-empt federal law governing  corrupt practices.  If the Plaintiffs can prove their claim, federal law authorizes its pursuit.