It’s not unusual for companies facing a worker compensation claim after a serious on-the-job injury to mount an aggressive defense.

However in one recent case, an injured employee alleged that not only had his company introduced false medical testimony in his case, it had done so in several of his fellow co-workers’ cases as well. It was on this basis that, after settling his workers’ compensation claim with the firm, he filed a lawsuit alleging the company, the administrators and the “independent” doctor engaged in a kind of fraud under the federal Racketeer Influenced and Corrupt Organizations Act (RICO).

Atlanta workers’ compensation lawyers understand the Sixth Circuit Court of Appeals recently affirmed dismissal of the case, Brown v. Ajax Paving Indus., Inc., on the grounds that the plaintiff didn’t lose anything as a result of the company’s actions. However, this was because he settled and wasn’t at risk of losing any of his benefits as a result.

The court didn’t rule on whether the company engaged in these acts. On that point, it’s possible another employee could successfully bring similar action, so long as they can show they suffered financial loss as a result.

According to court records, the case started when the plaintiff worker injured his shoulder while employed at the defendant paving company. Given that the injury occurred at work, the employee sought workers’ compensation.

However, a dispute arose, and the company refused to pay, forcing the worker to hire a lawyer and fight to be compensated.

At the hearing, attorneys for the employer presented medical testimony to the administrative law judge, indicating that the injury had occurred outside of work.

Prior to the conclusion of the case, the two agreed to a settlement, with the company ultimately agreeing to pay workers’ compensation.

In most cases, this would be the end of the controversy. Not here.

The worker alleged that the company had willfully introduced false medical testimony in order to deny him benefits or, at minimum, reduce the total amount. He further alleged that the firm had done this exact same thing to other workers.

He sued the agency under RICO. However, the district court dismissed.

Someone who files suit under RICO needs to prove that the racketeering activity caused injury to himself, his business or property. He contended that this was proven because the false testimony served to strengthen the defendant’s case, effectively forcing the plaintiff to accept a smaller settlement. Thus, he asserted the actions cost him a higher amount of workers’ compensation benefits that he otherwise deserved.

The appellate court noted that not long ago, “this theory of injury might have worked.” The circuit pointed to the 2012 case of Brown v. Cassens Transp. Co., wherein the court established that workers’ compensation benefits were considered “property” under RICO.

However, just last year, the court reversed that decision sitting en banc.

A case almost identical to this one, Jackson v. Sedgwick Claims Management Services, resulted in the court ruling that workers’ compensation benefits are not “property” for purposes of the RICO Act. The court reasoned that to interpret the law this way would create a system wherein workers’ compensation fraud could be policed via federal courts, when that is the responsibility of the states.

The plaintiff in this case retorted that while the Jackson ruling would effectively end his claim against his employer, the claims against the doctor and insurance company should still stand. The court rejected this argument.

The good news, as the Sixth Circuit pointed out, is that states can and do impose liability on those who defraud the workers’ compensation system. That means employers should still be held accountable for introduction of wrongful or false testimony. However, those claims must be filed in state court.

For information on Atlanta work injury compensation, contact J. Franklin Burns, P.C., at 1-404-920-4708 .