6th Circuit Bounces RICO Suit Against Sedgwick & Coca-Cola

A divided en banc panel of the Sixth Circuit Court of Appeals has reversed a decision by a three-judge panel of the same Circuit Court that had allowed a RICO action filed against Sedgwick Claims Management and Coca-Cola Enterprises to move forward [Jackson v. Sedgwick Claims Management Servs., Inc., 2013 U.S. App. LEXIS 19495 (Sept. 24, 2013)]. In the RICO action, plaintiffs contended in relevant part that the defendants had engaged in a fraudulent scheme involving the mail to avoid paying plaintiffs’ workers’ compensation claims. The civil action was dismissed by the U.S. District Court for the Eastern District of Michigan, but reinstated on appeal by the three-judge panel. In its reversal and reinstatement of the original dismissal, the divided en banc panel (11 to 5) reasoned that if Congress had intended for RICO to serve as an alternative federal forum for workers compensation disputes, “it would have provided more explicit guidance” to do so. Plaintiffs’ expectation of workers’ compensation benefits was not a sufficient property interest under the RICO statute, said the majority. While the majority acknowledged that the RICO law was to be given liberal construction, it was never intended as “a means for federalizing personal injury tort claims arising under state law.” Judge Karen Nelson Moore wrote for the dissent, indicating that the plaintiffs had indeed alleged a property-related injury. The dissent agreed with the three-judge panel that the action should move forward.

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