UNITED STATES DISTRICT COURT

IN THE EASTERN DISTRICT OF MICHIGAN

CLIFTON E. JACKSON and Case No.: 2009-11529

CHRISTOPHER M. SCHARNITZKE, Judge David M. Lawson

Plaintiffs, on behalf of themselves and 

 other persons similarly situated

SEDGWICK CLAIMS MANAGEMENT 

SERVICES, INC, and COCA COLA

ENTERPRISES, INC, foreign corporations,

and DR. PAUL DROUILLARD, 

Jointly and Severally, 

Defendants.

______________________________________________________________________________ 

MARSHALL LASSER P25573 

MARSHALL LASSER PC

Attorney for plaintiffs

po box 2579 

Southfield MI 48037

248-647-7722

mlasserlaw@aol.com

ddtalon@gmail.com

Thomas W. Cranmer P25252

Matthew F. Leitman P48999

Miller Canifield Paddock & Stone, P.L.C.

Attorneys for Defendant Coca-Cola

840 West Long Lake Road, Ste. 200

Troy, MI 48098

248-879-2000

cranmer@millercanfield.com

leitman@millercanfield.com

BUTZEL LONG

By: Daniel B. Tukel P34978

Lynn A. Sheehy P38162

Katherine D. Goudie P62806

Attorneys for Defendant Dr. Drouillard

150 W. Jefferson, Ste. 100

Detroit, MI 48226

313-225-7000

tukel@butzel.com

sheehy@butzel.com

goudie@butzel.com

Kathleen H. Klaus P67207

Attorney for Sedgwick 

28400 Northwestern Hwy., 3rd Fl

Southfield, MI 48034

248-354-4030

khk@maddinhauser.com

______________________________________________________________________________

PLAINTIFFS’ RESPONSE TO SEDGWICK’S RULE 12(b) MOTION TO DISMISS

Sedgwick’s motion should be dismissed for reasons stated in the brief. 

PROOF OF SERVICE

The undersigned certifies that this instrument, together with all referenced attachments was

served on all parties to this case and/or their attorneys of record at their respective addresses

as disclosed by the pleadings on August 24, 2009 by the following method(s): 

[] U.S. Mail [] Fax [] Hand Delivered 

[] Federal Express [] UPS

[X] Other: ELECTRONICALLY EMAILED

 /s/Delilah D. Talon 

Signature of Serve

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BRIEF IN SUPPORT OF RESPONSE 

Concise Statement of Issue Presented

Should This Court Grant Sedgwick’s Motion to Dismiss Under Rule 12(b)(1) and (6)?

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Controlling Authorities

On the standard of review: Carver v Bunch, 946 F. 2d 451, 452 (6th Cir 1991). 

On the construction of the RICO statute: Sedima, SPRL v Imrex Co, 473 US 479 at 491 n.

10, 105 S Ct 3275 at 3283 n. 10, 87 L Ed 2d at 360 (1985)

On abstention and preemption doctrines: Brown et al Cassens, et al, 546 F3d 347 (Sixth Cir

2008).

On sufficiency of pleading proximate cause, predicate acts, continuity, damages, etc: Brown

et al Cassens, et al, 546 F3d 347 (Sixth Cir 2008).

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STATEMENT OF FACTS AND BACKGROUND

The plaintiffs’ allegations should be painfully familiar to the court. A bit of further

education as to the Michigan workers compensation system may help. Plaintiffs hired Marshall

Lasser to represent them in their workers compensation cases against Coke, and they agreed to pay

him an attorney fee if he gets them benefits (see Affidavit of Marshall Lasser, exhibit A). Also, Mr.

Lasser has about $100 expenses in each of the plaintiff’s workers compensation cases (for medical

records, copies, mileage, subpoena fees) and in a few months these expenses will exceed $1,500 per

case when the depositions of treating doctors are taken. Third, each plaintiff has spent money on

co-pays and self-pays of medical bills and mileage to and from doctors; this is out of pocket expense

already accrued, for which plaintiffs are entitled to payment under the Michigan Workers Disability

Compensation Act (WDCA), MCL 418.101 et seq, and rules promulgated thereunder.

ARGUMENT

 Standard of Review

The moving party in a motion brought under rule 12(b)(6) has a difficult burden. It must

persuade the court “beyond doubt that the plaintiff can prove no set of facts in support of his claim

which would entitle him to relief.” Carver v Bunch, 946 F. 2d 451, 452 (6th Cir 1991). At the

pleading stage of this RICO case, Dr. Drouillard must convince this court that “no set of facts”

which plaintiffs might present would prove a RICO violation and injury.

When considering a motion to dismiss, a court must construe the complaint in the light most

favorable to plaintiff and accept well-pleaded facts as true. Columbia Natural Resources Inc v Tatu,

58 F 3d 1101, 1109 (6th Cir 1995). Thus a court may not grant a Rule 12(b)(6) motion based upon

its disbelief of a complaint’s factual allegations. 

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The RICO Act is to be constructed liberally, in favor of plaintiffs, to effectuate its remedial

intent. 

In a portion of the statute that remains uncodified, Congress directed that RICO

“shall be liberally interpreted to effectuate its remedial purposes.” Section 401(a)

of Pub. L. No 91-452, 84 Stat. 947, 18 USC 1961 note.

Civil Rico, by Smith and Reed, Lexis-Nexis, para. Section 1.02, page 1-8.

Liberal construction shall be applied with special vigor to section 1964 of RICO, which

provides for the civil remedy sought by this suit: “... if Congress’ liberal-construction mandate is to

be applied anywhere, it is in §1964, where RICO’s remedial purposes are most evident.” Sedima,

SPRL v Imrex Co, 473 US 479 at 491 n. 10, 105 S Ct 3275 at 3283 n. 10, 87 L Ed 2d at 360 (1985)

1. Plaintiffs’ Claims Are Ripe.

Sedgwick argues plaintiffs’ claims are unripe because the Workers Compensation Agency

(formerly Bureau) 

has not yet determined whether Plaintiffs are entitled to

compensation.... let alone the amount of compensation. Plaintiffs’

injuries are not clear and definite (let alone established and likely)

and their RICO claims are therefore premature. Motorola Credit

Corp. v Uzan 322 F 3d 130, 135 (2d Cir 2003) (“[A] cause of action

does not accrue under RICO until the amount of damages becomes

clear and definite”); First Nationwide Bank v Gelt Funding Corp, 27

F3d 763, 767 (2d Cir 1994)...

***

....A RICO defendant cannot be liable for all potential

damages, but only those actually suffered by plaintiff. Those

damages can only be measured after the plaintiff has exhausted all

remedies available to redress the alleged fraud. Id [citing Gelt, supra]

....Plaintiffs cannot plead the amount of “out of pocket” loss

or even that they have suffered any out of pocket loss. Indeed,

Plaintiffs could be awarded benefits under the WDCA, leaving them

with no compensable injury under RICO.

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Sedgwick is wrong factually and legally. 

Sedgwick is wrong factually when it states “Plaintiffs cannot plead the amount of “out of

pocket” loss or even that they have suffered any out of pocket loss.” As shown in the affidavit

of Marshall Lasser, exhibit A, plaintiffs already have out of pocket loss: they have had to hire a

lawyer to get benefits, and that lawyer has spent about $100 expenses per plaintiff, soon to exceed

$1,500 per plaintiff. (These incurred expenses is can be alleged in a Third Amended Complaint if

required by the Court). 

Plaintiffs have other out of pocket expenses: each has spent money on mileage to and from

doctors (which Sedgwick has refused to pay); and each has spent money on doctor and prescription

co-pays and self-pays (which Sedgwick has refused to pay). There is yet another out of pocket

expense - medical bills plaintiffs have incurred (which Sedgwick has refused to pay).

Plaintiffs and their treaters submitted medical bills and mileage claims and co-pays and selfpays to Sedgwick and requested payment or reimbursement. Sedgwick knows this. It got the bills

and expenses and refused to pay them. Sedgwick’s argument that plaintiffs have no out of pocket

expense is a fraudulent argument. Sedgwick should be sanctioned for making a claim it knows is

false. 

Sedgwick is also wrong factually when it states, “Plaintiffs could be awarded benefits under

the WDCA, leaving them with no compensable injury.” Sedgwick knows this is false: plaintiffs will

have to pay their lawyer.

Even if plaintiffs are awarded benefits in full (and 95% of MI workers compensation cases

settle at less than 100 cents on the dollar - see affidavit of Marshall Lasser), plaintiffs will still have

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a compensable injury: their attorney fee. They have contracted to pay Marshall Lasser an attorney

fee in their workers compensation cases. They have incurred a definite financial obligation, even

though the amount is indefinite now.

Sedgwick is not only factually wrong, it is wrong legally, in claiming plaintiffs have no

standing to sue because their entire loss cannot be reduced to a dollar amount. Case law holds

that a RICO plaintiff has standing if he has incurred a definite financial injury, even if the amount

is indefinite. Brown et al Cassens, et al, 546 F3d 347 (Sixth Cir 2008) held the pleadings in that

case were sufficient to allege damages where plaintiffs alleged they would have to pay and attorney

fee and repay their lawyer his expenses. That ruling is binding on this court under stare decisis.

Plaintiffs here make the same claims as plaintiffs there. Both sets of plaintiffs claimed fraudulent

denial of workers compensation benefits (medical, wage loss, mileage).

Plaintiffs’ pleadings satisfy the three prong test of Lujan v Defenders of Wildlife, 504 US

555, 112 S Ct 2130, 119L Ed 2d 351 (1992), applied to the RICO case of Adult Video Assn v United

States Dept. Of Justice, 71 F3d 563,565 (6th Cir 1995):

“[T]he irreducible constitutional minimum of standing contains three

elements: First, the plaintiff must have an ‘injury in fact’ - an

invasion of a legally protected interest which is (a) concrete and

particularized,... and (b) actual or imminent, not conjectural or

hypothetical.... Second, there must be a causal connection between

the injury and the conduct complained of.... Third, it must be likely,

as opposed to merely speculative, that the injury will be redressed by

a favorable decision.”

After Lujan, the Supreme Court held that only very general allegations are needed to support

a RICO claim at the pleading stage. In NOW v Scheidler, 510 US 249, 256, 114 S Ct 798, 127 L Ed

2d 99 (1994), the court said, “At the pleading stage, general factual allegations of injury resulting

from defendant’s conduct may suffice, for on a motion to dismiss we presume that general

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allegations embrace those specific facts that are necessary to support the claim.”

The First Amended Complaint, plus the facts in the affidavit of Marshall Lasser which can

if the court requires by incorporated into an amended complaint, alleges actual out of pocket

expenses and losses which are definite in amount (attorney expenses, medical bills, medical

mileage, medical bill and prescription co-pays and self-pays, and unpaid weekly wage benefits) and

it alleges expenses which are definitely incurred but indefinite in amount (attorney fee, future

medical bills, weekly wage loss benefits, etc). The First Amended Complaint alleges damages

which are ripe under NOW, Lujan and Brown.

2. Plaintiffs’ Claims Are Not for Personal Injuries But Loss of Statutory

Insurance Benefits

Sedgwick strives to convert plaintiffs’ workers compensation claims into personal injury

claims. Sedgwick fails. Plaintiffs’ claims are for statutorily prescribed insurance benefits. 

Plaintiffs are not seeking pain and suffering and other damages associated with traditional personal

injury tort actions. Plaintiffs’ claims are for the financial benefits mandated by the WDCA. They

have incurred out of pocket losses and expenses already and will incur more in the next few weeks

as their workers compensation claims proceed before the Agency. The cases cited by Sedgwick are

irrelevant; point; they apply to traditional personal injury tort actions.

Furthermore, Brown, supra, forecloses Sedgwick’s argument. Brown held plaintiffs properly

plead claims for financial injuries - plaintiffs’ attorney fees and expenses in their workers

compensation cases. In addition to those financial losses recognized by Brown, plaintiffs are due

benefits mandated by the WDCA: their mileage to and from medical treatment; their co-pays and

self-pays for medical treatment; the time value of the delay in receipt of benefits due to Sedgwick’s

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denial of benefits, even if benefits are later awarded in full by the Agency.

Some of plaintiffs’ losses are definite now in dollar amounts - their attorney’s expenses, their

accrued and unpaid weekly benefits, their expenses to date for medical mileage and co-pays and

self-pays of medical bills due to their work injury, and the medical bills due to the work injury which

plaintiffs have incurred but are unpaid). The entire loss is not definite now because future medical

expenses are unknown, as is future wage loss and medical mileage.

Another element of damage which is definitely being incurred day by day is the time value

of the delayed receipt of benefits. Plaintiffs did not get their benefits when they alleged they were

due. If the Agency awards benefits in 2012 - or if, more likely, a settlement is reached in 2010

(95% of cases settle) - plaintiffs will be deprived of the use of the money

3. The Allegations Support Charges of Mail and Wire Fraud

Sedgwick argues, “Here, the alleged scheme was to deny plaintiffs workers compensation

benefits, not to defraud them of benefits,” emphasis by Sedgwick, Motion 10.

Sedgwick lies. There is no other word than “lies.” The First Amended Complaint alleges

fraud in plain English. The Complaint makes the same allegations for fraudulent denial of workers

compensation benefits which the undersigned counsel made in Brown, supra. 

For Sedgwick to say that the “alleged scheme was to deny Plaintiffs .....benefits, not to

defraud them of benefits” is to call black white. To call the moon the sun. To pretend Brown does

not exist. Simply, to lie.

Plaintiffs’ allegations in the First Amended Complaint describing the scheme to defraud are

in paragraphs 12-16, 17A - 23, 26, 28, 30-31B. They are identical in nature to the allegations of

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1 Brown held these allegations sufficient:

Plaintiffs alleged that Cassens, which was self-insured for purposes

of paying benefits under the WDCA, contracted with Crawford to

serve as a claims adjuster for the workers compensation claims of

Cassens’s employees. They further pleaded that Cassens, Crawford

and Margules, as well as other “cut off” doctors, engaged in a

pattern of racketeering that denied the plaintiffs’ workers

10

fraudulent denial of workers compensation made by the plaintiffs in Brown.

Sedgwick’s argument, The Complaint fails to state a claim under RICO, does not review

plaintiffs’ allegations. It does not set them out in the argument and attempt to point out why they

are not allegations for fraud. Sedgwick breezily says plaintiffs did not allege fraud, when they did.

Sedgwick’s argument is frivolous - and dishonest. Sedgwick should be sanctioned under Rule 11(b).

Also, Sedgwick does not even mention Brown, let alone attempt to distinguish it. It may

be proper at a cocktail party to ignore an 800 pound gorilla in the room - a disturbing fact which

everyone knows but no one mentions - but it is highly improper in a motion to dismiss to ignore the

800 pound gorilla of Brown, because counsel has a duty to argue in good faith, and to completely

ignore Brown is to argue in bad faith. Sedgwick should be sanctioned under Rule 11(b).

Sedgwick makes another sanctionable argument when it cites Blount Financial Services v

Walter E. Heller and Co, 819 F 2d 151, 152, (6thCir 1987) and US v Van Dyke, 605 F. 2d, 220, 225

(6th Cir 1979), cert den 444 US 994 (emphasis by Sedgwick) and argues, “In this case, Sedgwick’s

denial of benefits - for any reason - was not ‘reasonably calculated to deceive persons of ordinary

prudence and comprehension’” (emphasis by Sedgwick). This argument is improper and

sanctionable because it completely ignores the holdings of Brown, supra, and Bridge v Phoenix Bond

& Indemnity Co, 128 S Ct 2131 (2008), that an allegation of fraudulent deception is not a

requirement for a civil RICO case under 18 USC 1962(c).1

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compensation claims. Specifically, the plaintiffs alleged that

Cassens and Crawford deliberately selected and paid unqualified

doctors, including Margules, to give fraudulent medical opinions

that would support the denial of workers compensation benefits,

and that defendants ignored other medical evidence in denying

them benefits. The plaintiffs claimed that the defendants made

fraudulent communications amongst themselves and to the

plaintiffs by mail and wire in violation of 18 USC §§1341, 1343,

which serve as the predicate acts for their RICO claims.

Plaintiffs’ allegations in this case are essentially identical to those in

Brown. They allege defendants dishonestly and fraudulently denied them

benefits, including the use of “cut off” doctors such as Dr. Drouillard, and

defendants used the mails and wires to further this scheme. 

11

Allegations that defendants schemed to fraudulently take someone’s property, and used the

mails to further that scheme, properly allege mail fraud under RICO. In addition to Brown and

Bridge, see, eg, Neder v US, 527 US 1, 119 S Ct 1872, 144 L Ed 2d 35 (1999); Schmuck v United

States, 489 US 705, 715, 109 S Ct5 1443, 1450, 103 L Ed 2d 734 (1989); Abels v Farmers

Commodities Corp, 259 F 3d 910 (8th Cir 2001): “A plaintiff may, but need not, allege that a

defendant made misrepresentations of fact. [citation] Because misrepresentations of fact are not

necessary to the offense, it follows that no misrepresentations need by transmitted by mail or wire;

even routine business communications in these media may suffice to make a scheme of false dealing

into a federal offense.” Id, 918, emphasis supplied; Murr Plumbing Inc v Scherer Financial, supra,

48 F3d 1066 at 1069 (8th Cir 1995)“It follows that a RICO claim based upon the predicate acts of

mail or wire fraud does not require an allegation of a misrepresentation or common law fraud.... The

mail and wire fraud statutes encompass two types of frauds: those in which misrepresentations are

made, and those in which no misrepresentations are made...”(emphasis supplied); Schreiber

Distributing v Serv-Well Furniture Co, 806 F2d 1393 (9th Cir 1986) (to allege a violation of the mail

fraud statute, plaintiff need only allege a mailing was made in furtherance of the scheme to defraud;

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no misrepresentation was needed; plaintiffs must show “(1) The defendants formed a scheme or

artifice to defraud; (2) the defendants used the United States mails or caused a use of the US mails

in furtherance of the scheme; and (3) the defendants did so with the specific intent to deceive or

defraud... This is consistent with the purpose of the statutes, which is to proscribe the use of the

mails or wires in any situation where it is closely entwined with fraudulent activity.” Id, 1400; in

Tabas v Tabas, 47 F3d 1280, 1294 (3rd Cir 1995), defendants were executors of an estate; the Third

Circuit, sitting en banc, held that each time defendants made a questionable charge or received

compensation to which they were not entitled, they committed acts of fraud; citing Schmuck, supra,

and Kehr Packages v Fidelcor Inc., 926 F. 2d F 2. 1406, 1415 (3rd Cir 1991), the court held that

completely innocent mailings in furtherance of this fraud can supply the mailing element in a RICO

claim based on 18 USC §1341. Id, 1294. 

Sedgwick next argues, “Violation” of the WDCA through the mail will not support a

claim under RICO. This is in essence an argument for preemption or abstention, and it fails for

the reasons given in Brown. 

No preemption or abstention doctrine would apply given the grounds Brown gave for

rejecting defendants’ request for McCarran Ferguson Act reverse preemption: a RICO suit does not

invalidate, impair or supersede the operation of Michigan’s WDCA. A RICO suit would not

“frustrate any declared state policy or interfere with a state’s administrative regime.”

Brown said:

 ...we note that RICO is also saved from reverse preemption under the

McCarran-Ferguson Act because RICO would not ‘invalidate, impair or impede’ the

WDCA. RICO would not invalidate or supersede the WDCA because RICO would

not “render [the WDCA] ineffective” given that those subject to these laws can

comply with both simultaneously. See Humana, 525 US at 307, 119 Sc. Ct. 710. 

(“The term ‘invalidate’ ordinarily means ‘to render ineffective, generally without

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providing a replacement rule or law[,]’ [a]nd the term ‘supersede’ ordinarily means

‘to displace (and thus render ineffective) while providing a substitute rule.). The

question remains whether RICO would “impair” the WDCA. In construing the term

“impair,” the Supreme Court explained that “[w]hen federal law does not directly

conflict with state regulation, and when application of the federal law would not

frustrate any declared state policy or interfere with a State’s administrative regime,

the McCarran-Ferguson Act does not preclude its application.” Id, at 310, 119 S Ct

710.

...Moreover, the federal interest in protecting individuals against a pattern of

racketeering activity based on fraud is “perfectly compatible” with the state interest

in providing a certain remedy for employees who have suffered workplace injuries.

Id, at 311, 119 S Ct 710. 

Furthermore, RICO is to be liberally construed to effectuate its remedial goals. Liberal

construction shall be applied with special vigor to section 1964 of RICO, which provides for the

civil remedy sought by this suit: “... if Congress’ liberal-construction mandate is to be applied

anywhere, it is in §1964, where RICO’s remedial purposes are most evident.” Sedima, SPRL v

Imrex Co, 473 US 479 at 491 n. 10, 105 S Ct 3275 at 3283 n. 10, 87 L Ed 2d at 360 (1985).

Sedgwick claims the Michigan Uniform Trades Practices Act creates not duties applicable

here. True, the UTPA may not create a duty, but violation of the UTPA may be used at trial as

evidence of negligence. The Michigan courts have held that violation of a rule or statute may be

used as evidence of improper conduct even where that rule or statute does not create a duty, Zalut

v Anderson &Assoc, Inc, 186 Mich App 229, 235-37, 463 NW2d 236 (1996).

Sedgwick’s final argument is The allegations undermine an inference of a pattern in the

alleged conduct. This argument fails because plaintiffs in their First Amended Complaint (FAC)

and more so in their proposed Second Amended Complaint (Second Revision) (SAC/SR) amply and

abundantly plead continuity and a pattern. The FAC involves two plaintiffs who seek to represent

a class, and it involves at least five predicate acts for each plaintiff (ten total), and alleges predicate

acts by defendant as a regular and ongoing way of doing business, and alleges predicate acts

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committed against other claimants. Here are some of these allegations in the FAC.

31. The Pattern of Racketeering and the Claims of Each Plaintiff. The

pattern of racketeering and some of the particular means of achieving this fraudulent

scheme which are known to plaintiffs at this time are described below plaintiff by

plaintiff (paras. A and B). These allegations are based on information and belief, and

are likely to have evidentiary support after a reasonable opportunity for investigation

and discovery; for example, precise dates of mailing or faxing or emailing among

defendants or their agents are known to defendants and not plaintiffs. These

allegations describe a pattern of racketeering spread over several years, continuing

in the present and likely to continue into the future... With regard to each plaintiff,

Coke and Sedgwick or their agents used the mails and wires at least five times in

furtherance of the scheme to deprive a plaintiff of his or her workers compensation

benefits: (1) mailing by Sedgwick from its Kentucky or Chicago area claims office

a notice to the plaintiff to appear for an “independent medical examination” with Dr.

Drouillard or another cut off doctor; (2) mailing or faxing or phoning to Dr.

Drouillard in Garden City, MI, the notice that a plaintiff would appear before him for

the exam; (3) mailing or faxing the doctor’s report from Warren or Garden City MI

to Sedgwick at its Kentucky office: (4) mailing by Sedgwick or its agent from its

office in Kentucky or Chicago of the report to the plaintiff; (5) mailing or faxing by

Dr. Drouillard, either from his office in Warren MI at MES or from his Garden City

MI office, his report to Sedgwick in Kentucky; (6) mailing the Notice of Dispute by

Sedgwick from its Kentucky or Chicago office to the Agency in Lansing MI and to

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the plaintiff. The persons who engaged in the pattern of racketeering are, in addition

to the named defendants, the individuals at the Sedgwick and Coke workers

compensation claims departments who handled Michigan workers compensation

claims. The dates of some of these mailed, emailed or faxed communications are

within the possession of defendants. 

31 A. CLIFTON JACKSON

Clifton E. Jackson was employed by Coke when on 9/17/2007 he injured his

lumbosacral spine. He was treated thereafter by Dr. Shlomo Mandel of the Henry

Ford Hospital system, a specialist in treating the low back. Dr. Mandel determined

that plaintiff has been disabled by his work-related back injury from 9/2007 to the

present, and continuing. In May 2008, Sedgwick required plaintiff to attend an

“independent medical examination” by Dr. Terry Weingarden, paid for by

defendants. Dr. Weingarden opined that plaintiff was disabled by his work-related

injury. Sedgwick later had plaintiff examined again by Dr. Weingarden, and again

he opined plaintiff was disabled. 

Despite these opinions, on Jan. 6, 2009, LaTara Lewis of Sedgwick mailed

plaintiff a letter stating, “I have scheduled an Independent Medical Evaluation for

you with Dr. Drouillard on Jan. 14, 2009....” The letter was fraudulent in that Dr.

Drouillard was not an “independent” doctor but was hired and paid by Segwick, not

by a person or entity with no financial stake in the outcome of plaintiff’s claim; in

that Drouillard was paid by Sedgwick and other workers compensation insurers

hundreds of thousands of dollars to examine Mr. Jackson and other workers

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compensation claimants; in that Dr. Drouillard participated in a scheme to

fraudulently and dishonestly deprive plaintiff and, on information and belief,

thousands of other workers compensation claimants of their workers compensation

benefits... 

Dr. Drouillard mailed wrote a report of his examination dated Jan. 14, 2009

to Sedgwick, and Sedgwick mailed or emailed a copy to plaintiff. The report

contained lies. [allegations omitted]

***

31 B. CHRISTOPHER SCHARNITZKE

 

E. The Concentra records were sent immediately to Sedgwick. Despite

having received these records, Sedgwick mailed to the Agency and to plaintiff on

March 18, 2008 a Notice of Dispute stating “medical treatment not related to

injury.....IW [injured worker] has been diagnosed with acromioclavicular arthritis.”

Sedgwick did not have information from which it could honestly and fairly conclude

that plaintiff’s disability in March 2008 was due to acromioclavicular arthritis, and

was not work-related. Instead, it had information from Concentra stating “minor

work aggravation,” which was legally sufficient to qualify plaintiff for workers

compensation benefits. Furthermore, it did not have information that the

acromioclavicular arthritis which preceded the work injury of March 4, 2008, was

not work-related. Sedgwick also had information that plaintiff had returned in

March 2008 to his orthopedic surgeon, Dr. Milia.

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F. Since March 18, 2008, Sedgwick and Coke have repeatedly denied

benefits despite having received, directly and from their attorneys, proof that plaintiff

had suffered a new rotator cuff tear. Inter alia, defendants through their [attorney]

mailed a CARRIER’S RESPONSE to the Agency and to plaintiff falsely denying -

despite having sufficient proof to the contrary - that plaintiff was disabled and that

the disability was work-related. Even after receiving an IME report in Nov. 2008

from Dr. Michael Holda, which stated plaintiff was disabled due to a shoulder injury

and did not say that the disability was not work-related, defendants continued to deny

that plaintiff was disabled due to a work-related condition.

** *

On or about July 22, 2008, Coke and Sedgwick mailed to the Agency and to

plaintiff or his counsel a Carrier’s Response, which denied that plaintiff was

disabled; that denial was false, in that defendants possessed information that plaintiff

was disabled, and no information that plaintiff was not disabled. The Response also

denied that the disability was work related, and that denial was false, in that

defendants had sufficient proof from plaintiff’s medical records of a work related

disability, and no proof the disability was not work related.

In April 2009, Coke and Sedgwick received, via their workers compensation

attorney, a note written by Dr. Milia dated 3/26/09 and stating: 

I am the orthopedic surgeon who has treated Mr. Scharnitzke’s left shoulder

since 2007. His current shoulder disability (from March 3, 2008 to April

2009) was caused by the 13 years of repetitive heavy lifting and pulling

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2 Sedgwick cites at length to Moon v Harrison Piping Supply, 465 F 3d 719 (6th Cir

2006). Moon was effectively overruled by Brown; even Sedgwick notes “The

holding in Moon in this regard appears to be at odds with the holding in Brown.” 

Brief 19. Regardless, Moon presented a very different set of facts; it involved a

single plaintiff. Here, the FAC involves two plaintiffs, and the proposed SAC/SR

involves three, and both complaints allege a class action.

18

required by Mr. Scharnitzke’s job at Coca Cola, and was also caused by the

injury at work on 3/3/08.

Despite receipt of this note, defendants continued to deny benefits and used

the mails and wires to continue to deny benefits.

These allegations allege pattern and continuity, under Brown, supra. Furthermore, any

deficiency in the FAC may be cured by discovery, As Brown noted in footnote 4, the Sixth Circuit

has held plaintiffs were entitled to discovery before their complaints were dismissed:

See Michaels Building Co v Ameritrust Co, 848 F. 2d 674 679-81, (6th Cir 1988)

(holding that plaintiffs alleging RICO civil fraud claims that failed to satisfy Rule

9(b)’s particularity requirement were entitled to opportunity for discovery under Rule

11(b)(3) before their claims were dismissed). Should discovery confirm the

plaintiffs’ initial beliefs regarding the fraudulent nature of the dismissed allegations

and provide the necessary details to satisfy Rule 9(b), the plaintiffs can then amend

the complaint to replead the dismissed allegations. See FED. R. CIV P 15(a), Tucker

[v Union of Needletrades, Indus., & Textile Employees, 407 F. 3d 784 (6th Cir 20050]

407 F3d at 788.

Moreover, any deficiency in the FAC is cured by the proposed Second Amended Complaint

(Second Revision), which adds plaintiff Paul Lulek and at least two more predicate acts.2

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RELIEF REQUESTED

Sedgwick’s Rule 12(b)(6) motion on this ground should be dismissed. Sanctions should be

awarded against Sedgwick under Rule 11(b)(1 and 2) for the frivolous and dishonest arguments

made by Sedgwick. 

/s/ Marshall Lasser 

Marshall Lasser PC, by 

Marshall Lasser P25573

po box 2579

Southfield MI 48307

(248) 647 7722

mlasserlaw@aol.com

ddtalon@gmail.com

Dated: August 24, 2009

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