Brown v. Cassens Transport Co.
2012 U.S. App. LEXIS 6929
| 6th Cir. | 2012Background
- Plaintiffs allege fraud and RICO violations related to denials of Michigan WDCA worker's compensation benefits by Cassens and Crawford, with Dr. Margules allegedly aiding the scheme.
- Cassens denied Brown's claim; others settled or were determined by WCAC; Brown's merits adjudication occurred at WCAC.
- District court dismissed under Rule 12(b)(6) for lack of reliance; Sixth Circuit previously affirmed and Supreme Court vacated for remand.
- On remand, district court dismissed for WDCA exclusivity, noninjury-to-property, and speculative damages; plaintiffs appeal.
- Court addresses whether federal RICO remains available where state WDCA provides overlapping remedies and whether injuries qualify as RICO property injuries.
- Majority holds Supremacy Clause allows federal RICO remedy; finds statutory entitlements to WDCA benefits are property and can be harmed by RICO fraud.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| RICO vs WDCA preemption | RICO remedy not foreclosed by WDCA exclusivity. | WDCA exclusivity forecloses federal RICO claims. | RICO remedies not foreclosed; Supremacy Clause permits federal RICO claim. |
| Injury to property under RICO | WDCA entitlements and claims are property under RICO. | Damages derive from personal injury; not injury to property. | Statutory entitlements and their devaluation constitute injury to property. |
| Property interest in expectancy vs actual benefits | In Michigan, benefit expectancy can be a property interest; damages need not wait for payment. | Entitlement arises only upon award; expectancy lacks enforceable property interest. | In Michigan, both expectancy and claim to benefits can constitute property interest; injury may arise from devaluation. |
| Effect of settlement/adjudication on RICO claim | Fraud taints proceedings; ongoing or tainted outcomes do not extinguish property interest. | Settlement or adverse adjudication defeats injury. | Settlement or tainted adjudication does not extinguish injury to property; RICO damages recoverable. |
| Damages measurement and standing | Damages for benefits denied and related costs are ascertainable; treble damages permissible. | Damages may be speculative or derivative of personal injuries. | Damages are quantifiable under RICO; entitlement to treble damages allowed for injury to property. |
Key Cases Cited
- Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (U.S. 1985) (RICO broad remedial purpose)
- Reiter v. Sonotone Corp., 442 U.S. 330 (U.S. 1979) (business or property scope in RICO)
- United States v. Blandford, 33 F.3d 685 (6th Cir. 1994) (mail fraud overlap with state law; jurisdictional relevance)
- Evans v. City of Chicago, 434 F.3d 916 (7th Cir. 2006) (pecuniary losses flowing from personal injury not property)
- Grogan v. Platt, 835 F.2d 844 (11th Cir. 1988) (pecuniary losses from personal injury generally not property)
- Williams v. Hofley Mfg. Co., 430 Mich. 603 (Mich. 1988) (state property interest in benefits; related due process)
- American Manufacturers Mutual Ins. Co. v. Sullivan, 526 U.S. 40 (U.S. 1999) (due process limits on property interest in benefits)
- Logan v. Zimmerman Brush Co., 455 U.S. 422 (U.S. 1982) (state-created entitlement as property for due process purposes)
- Castle Rock v. Gonzales, 545 U.S. 748 (U.S. 2005) (property interest requires clear statutory entitlement; discretionary denial affects expectancy)
- Diaz v. Gates, 420 F.3d 897 (9th Cir. 2005) (state law property interests may vary; context-specific)