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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

CLIFTON E. JACKSON and 

CHRISTOPHER M. SCHARNITZKE, Case No: 09-cv-11529

Plaintiffs, The Honorable David M. Lawson

v.

SEGWICK CLAIMS MANAGEMENT SERVICES, INC.,

COCA-COLA ENTERPRISES, INC. and

DR. PAUL DROULILLARD,

Defendants.

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Marshall D. Lasser (P25573)

Marshall D.Lasser, P.C.

P.O. Box 2579

Southfield, Michigan 49037

Telephone: (248) 647-7722

mlasserlaw@aol.com

Attorneys for Plaintiffs

Thomas W. Cranmer (P25252)

Matthew F. Leitman (P48999)

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

840 West Long Lake Road, Suite 200

Troy, Michigan 48098

Telephone: (248) 879-2000

cranmer@millercanfield.com

leitman@millercanfield.com

Attorneys for Defendant Coca-Cola 

Enterprises, Inc.

Daniel B. Tukel (P34978)

Lynn A. Sheehy (P38162)

Katherine D. Goudie (P62806)

Butzel Long

150 W. Jefferson, Suite 100

Detroit, Michigan 48226

tukel@butzel.com

sheehy@butzel.com

goudie@butzel.com

Telephone: (313) 225-7000

Attorneys for Defendant Dr. Paul Drouillard

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DEFENDANT COCA-COLA ENTERPRISES, INC.’S MOTION TO DISMISS, OR, IN 

THE ALTERNATIVE, FOR A STAY OF PROCEEDINGS, AND NOTICE OF JOINDER 

IN DEFENDANT PAUL DROUILLARD’S MOTION TO DISMISS

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Pursuant to Fed.R.Civ.P. 12(b)(1) & 12(b)(6), Defendant Coca-Cola Enterprises, Inc. 

(“Coke”) moves for dismissal of Plaintiffs’ Complaint and all of the claims therein, or, in the 

alternative, for a stay of proceedings, and in support Coke says as follows:

1. Plaintiffs are current or former employees of Coke who applied for and were 

denied continuing workers compensation disability benefits. In this action, Plaintiffs assert 

against Coke a claim under the federal RICO statute, 18 U.S.C. 1964, based upon the allegedlyfraudulent denial of their claims for benefits.

2. As described in detail in the supporting brief, Plaintiffs’ claims fail as a matter of 

law and should be dismissed for the following reasons:

a. No plaintiff may assert a RICO claim based upon the allegedlyfraudulent violation of a statutory duty where the statute that creates the duty also 

(i) establishes a specialized administrative scheme to enforce and regulate the 

duty and (ii) prescribes the exclusive remedy for any breach of the duty. Here, 

Michigan’s Workers Disability Compensation Act (i) establishes a specialized 

administrative scheme to enforce and regulate the duty to pay benefits to injured 

employees under the Act and (ii) prescribes the exclusive remedy for an injured 

employee and for an employee whose claim for benefits has been disputed –

even if disputed in bad faith. Plaintiffs cannot use their RICO claim as an “end 

run” around the WDCA;

b. The breach of statutory duties created under certain comprehensive 

administrative statutes – even when fraudulent – does not give rise to a RICO 

claim. The duties created under the WDCA to pay benefits to injured employees 

and to do so on a timely basis are just such duties; even the fraudulent breach of 

these duties cannot support a RICO claim;

c. Plaintiffs assert a RICO claim against Coke for violating 18 U.S.C. 

1962(a). In order to state a viable claim for violation of this statute, a plaintiff 

must allege injuries stemming directly from a defendant’s use or investment of 

income obtained from a pattern of racketeering activity. Plaintiffs do not make 

such an allegation against Coke – nor could they do so because they have no such 

injuries. 

d. Plaintiffs assert a RICO claim against Coke for violating 18 U.S.C. 

1962(b). In order to state a viable claim for violation of this statute, a plaintiff 

must allege (a) that the defendant acquired or maintained an interest in, or control 

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of, an enterprise through a pattern of racketeering activity, (b) how the defendant 

acquired or maintained control, and (c) that the interest defendant acquired in the 

enterprise was a proprietary one. Plaintiffs do not make such allegations – nor 

could they.

e. Plaintiffs assert a claim against Coke for violating 18 U.S.C. 

1962(c). In order to state a viable claim for violation of this statute, a plaintiff 

must allege that (1) the defendant (2) through the commission of two or more 

predicate acts, (3) constituting a pattern (4) of racketeering activity, (5) 

participated in (6) an enterprise (7) the activities of which affect interstate 

commerce. Plaintiffs failed to sufficiently allege the existence of any enterprise, 

failed to sufficiently allege that Coke participated in the affairs of the enterprise, 

and failed to allege that Coke committed any predicate acts. 

3. In addition to the grounds for dismissal listed in paragraph 2 above and explained 

in Coke’s supporting brief, Coke joins in Defendant Paul Drouillard’s motion to dismiss and 

adopts the following arguments by Dr. Drouillard in favor of dismissal and/or in favor of a stay 

of proceedings:

a. Plaintiffs have failed to plead sufficiently the existence of a RICO 

enterprise (Dr. Drouillard’s Brief at 17-19.)

b. This Court should dismiss this action, should abstain from 

adjudicating Plaintiffs’ claims, and/or should stay the action pursuant to the 

primary jurisdiction doctrine (Dr. Drouillard’s Brief at 23-25.)

c. This Court should dismiss this action, should abstain from 

adjudicating Plaintiffs’ claims, and/or should stay the action pursuant to the 

Burford abstention doctrine (Dr. Drouillard’s Brief at 25-28.)

d. This Court should dismiss this action, should abstain from 

adjudicating Plaintiffs’ claims, and/or should stay the action because the outcome 

of the administrative proceedings under the WDCA will bar Plaintiffs’ RICO 

claims (Dr. Drouillard’s Brief at 28-33.)

e. This Court should dismiss this action, should abstain from 

adjudicating Plaintiffs’ claims, and/or should stay the action pursuant to the 

Rooker-Feldman abstention doctrine (Dr. Drouillard’s Brief at 29-32.)

f. This Court should dismiss this action, should abstain from 

adjudicating Plaintiffs’ claims, and/or should stay the action on the basis of 

reverse preemption by the McCarran-Ferguson Act (Dr. Drouillard’s Brief at 33-

34.) Coke recognizes that the United States Court of Appeals for the Sixth Circuit 

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rejected this argument in Brown v. Cassens Transp. Co., 546 F3d 347 (6th Cir. 

2008). The defendant in that case has petitioned the United States Supreme Court 

for a writ of certiorari. Coke raises this issue to preserve it in the event that the 

decision of the Sixth Circuit is reversed, or the law otherwise changes.

4. Counsel for Coke called counsel for Plaintiffs to seek concurrence in this motion 

and concurrence was denied.

WHEREFORE, Coke respectfully requests that this Court enter an order dismissing 

Plaintiffs’ Complaint and all of the claims therein with prejudice, that the Court enter judgment 

against Plaintiffs and in favor of Coke, and that the Court award Coke it attorneys fees, costs, 

and any other relief deemed appropriate. In the alternative, Coke respectfully requests that this 

Court enter an order staying this action pending a final decision on Plaintiffs’ pending 

administrative proceedings challenging the denials of their claims for benefits.

Respectfully submitted,

MILLER, CANFIELD, PADDOCK AND STONE, P.L.C.

By: s/Matthew F. Leitman

Thomas W. Cranmer (P25252)

Matthew F. Leitman (P48999)

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

840 West Long Lake Road, Suite 200

Troy, Michigan 48098

Telephone: (248) 879-2000

cranmer@millercanfield.com

leitman@millercanfield.com

Attorneys for Defendant Coca-Cola Enterprises, Inc.

Dated: July 15, 2009

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

CLIFTON E. JACKSON and 

CHRISTOPHER M. SCHARNITZKE, Case No: 09-cv-11529

Plaintiffs, The Honorable David M. Lawson

v.

SEGWICK CLAIMS MANAGEMENT SERVICES, INC.,

COCA-COLA ENTERPRISES, INC. and

DR. PAUL DROULILLARD,

Defendants.

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Marshall D. Lasser (P25573)

Marshall D. Lasser, P.C.

P.O. Box 2579

Southfield, Michigan 49037

Telephone: (248) 647-7722

mlasserlaw@aol.com

Attorneys for Plaintiffs

Thomas W. Cranmer (P25252)

Matthew F. Leitman (P48999)

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

840 West Long Lake Road, Suite 200

Troy, Michigan 48098

Telephone: (248) 879-2000

cranmer@millercanfield.com

leitman@millercanfield.com

Attorneys for Defendant Coca-Cola 

Enterprises, Inc.

Daniel B. Tukel (P34978)

Lynn A. Sheehy (P38162)

Katherine D. Goudie (P62806)

Butzel Long

150 W. Jefferson, Suite 100

Detroit, Michigan 48226

tukel@butzel.com

sheehy@butzel.com

goudie@butzel.com

Telephone: (313) 225-7000

Attorneys for Defendant Dr. Paul Drouillard

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BRIEF IN SUPPORT OF DEFENDANT COCA-COLA ENTERPRISES, INC.’S

MOTION TO DISMISS, OR, IN THE ALTERNATIVE,

FOR A STAY OF PROCEEDINGS

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STATEMENT OF QUESTIONS PRESENTED

I. Plaintiffs assert three different RICO claims against Defendant Coca-Cola Enterprises, 

Inc. (“Coke”). The claims are based upon Coke’s alleged violation of duties it 

purportedly owed to Plaintiffs under Michigan’s Workers Disability Compensation Act

(“WDCA”): namely, the duties to fairly and honestly evaluate Plaintiffs’ claims for

disability benefits. The WDCA establishes a comprehensive and exclusive 

administrative scheme to determine whether an employer/insurer has complied with its 

duties under the statute and has properly denied a claim for benefits. In light of the 

WDCA’s comprehensive and exclusive administrative and remedial provisions, should 

this Court dismiss Plaintiffs’ RICO claims?

Coke says: YES

II. As noted above, Plaintiffs seek to hold Coke liable under RICO based upon Coke’s 

violation of duties created by the WDCA. But the duties created by the WDCA are not 

the type of duties that when breached – even fraudulently – give rise to RICO liability. 

Should this Court dismiss Plaintiffs’ RICO claims based on breaches of duties owed 

under the WDCA?

Coke says: YES

III. Plaintiffs assert a RICO claim against Coke for violating 18 U.S.C. 1962(a). In order to 

state a viable claim for violation of this statute, a plaintiff must allege injuries stemming 

directly from a defendant’s use or investment of income obtained from a pattern of 

racketeering activity. Plaintiffs do not make such an allegation against Coke – nor could 

they do so because they have no such injuries. Should this Court dismiss Plaintiffs’ claim 

for violation of 18 U.S.C. 1962(a)?

Coke says: YES

IV. Plaintiffs assert a RICO claim against Coke for violating 18 U.S.C. 1962(b). In order to 

state a viable claim for violation of this statute, a plaintiff must allege (a) that the 

defendant acquired or maintained an interest in, or control of, an enterprise through a 

pattern of racketeering activity, (b) how the defendant acquired or maintained control, 

and (c) that the interest defendant acquired in the enterprise was a proprietary one. 

Plaintiffs do not make such allegations – nor could they. Should this Court dismiss 

Plaintiffs’ claim for violation of 18 U.S.C. 1962(b)?

Coke says: YES

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STATEMENT OF QUESTIONS PRESENTED, CONTINUED

V. Plaintiffs assert a claim against Coke for violating 18 U.S.C. 1962(c). In order to state a 

viable claim for violation of this statute, a plaintiff must allege that (1) the defendant (2) 

through the commission of two or more predicate acts, (3) constituting a pattern (4) of 

racketeering activity, (5) participated in (6) an enterprise (7) the activities of which affect 

interstate commerce. Plaintiffs failed to sufficiently allege the existence of any 

enterprise, failed to sufficiently allege that Coke participated in the affairs of the 

enterprise, and failed to allege that Coke committed any predicate acts. Should this Court 

dismiss Plaintiffs’ claim for violation of 18 U.S.C. 1962(c)?

Coke says: YES

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CONTROLLING OR MOST APPROPRIATE AUTHORITY

Issue I: Plaintiffs Cannot Use Their RICO Claim as an “End Run” Around the 

Comprehensive and Exclusive Procedures and Remedies Established by the 

Workers Disability Compensation Act

Couture v. General Motors Corp., 125 Mich. App. 174, 335 N.W.2d 668 (1983)

Danielsen v. Burnside-Ott Aviation, 746 F.Supp. 170 (D.D.C. 1990), 

aff’d 941 F.2d 1220 (D.C. Cir. 1991)

Harper v. Autoalliance Int’l Inc., 392 F.3d 195 (6th Cir. 2000)

Livingston v. Shore Slurry Seal, Inc., 98 F.Supp.2d 594 (D.N.J. 2000)

Warner v. Collavino Bros., 133 Mich. App. 230, 347 N.W.2d 787 (1984)

28 U.S.C. 1445(c)

Issue II: Plaintiffs’ RICO Claims Fail Because They Are Based Upon Coke’s Breach of 

Duties Owed to Plaintiffs Under the WDCA, But the Breach of Such Duties –

Even Where Fraudulent – Does Not Give Rise to Liability Under RICO

Ayres v. General Motors Corp., 234 F.3d 514 (11th Cir. 2000)

McCulloch v. PNC Bank, 298 F.3d 1217 (11th Cir. 2002)

Issue III: Plaintiffs Have Failed to State a Claim for Violation of 18 U.S.C. 1962(a)

Craighead v. E. F. Hutton Co., Inc., 899 F.2d 485 (6th Cir. 1990)

Eby v. Producers Co-Op, Inc., 959 F.Supp. 428 (W.D. Mich. 1997)

Issue IV: Plaintiffs Have Failed to State a Claim for Violation of 18 U.S.C. 1962(b)

Advocacy Org. for Patients v. Auto Club Ins. Co., 176 F.3d 315 (6th Cir. 1999)

Whaley v. Auto Club Ins. Assoc., 891 F.Supp. 1237 (E.D. Mich. 1995)

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CONTROLLING OR MOST APPROPRIATE AUTHORITY, CONTINUED

Issue V: Plaintiffs Have Failed to State a Claim for Violation of 18 U.S.C. 1962(c)

Armbruster v. K-H Corp., 206 F.Supp.2d 870 (E.D. Mich. 2002)

Reves v. Ernst & Young, 507 U.S. 170 (1993)

Sedima, S.P.R.L. v. IMREX Co., Inc., 473 U.S. 479 (1985)

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INTRODUCTION

Plaintiffs Christopher Scharnitzke and Clifton Jackson, current or former employees of 

Defendant Coca-Cola Enterprises, Inc. (“Coke”), applied for, and were denied, continuing

workers compensation disability benefits. They insist that they were in fact disabled and were 

entitled to the benefits they sought. They have challenged the denials of their claims for benefits 

under the comprehensive and exclusive administrative scheme established by the Michigan 

Workers Disability Compensation Act, MCL 418.101, et. seq. (“WDCA”). But they are not 

content to let that required state administrative process run its course. They have filed this action 

in an attempt to convert their workers compensation disputes into a federal RICO case – the basis 

of which is the Defendants’ allegedly-fraudulent violation of the WDCA.

Plaintiffs’ effort to convert their disputes over benefits into RICO claims, while creative, 

must be rejected. Plaintiffs’ RICO claims seek to expand RICO far beyond its intended reach. 

As the federal courts have repeatedly held, a plaintiff may not use a RICO claim as an “end run” 

around a comprehensive, specialized, and exclusive administrative scheme like the scheme 

established by the WDCA. Yet that is precisely what these Plaintiffs seek to do. 

Plaintiffs’ RICO claims here are especially objectionable because they seek to 

substantially modify Michigan’s workers compensation regime – a regime that was the product 

of a careful state legislative compromise. For instance, Plaintiffs seek to recover treble damages 

and attorneys fees even though the Michigan Legislature strictly limited liability for disputing a 

workers compensation claim – even if the dispute was lodged in bad faith. Plaintiffs may not use 

their federal RICO claim to re-write Michigan’s workers compensation law; allowing them to do 

so would be a wholly unwarranted federal intrusion into Michigan state law and procedure.

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Furthermore, as explained in detail below, a breach of duties created by the WDCA –

even if fraudulent – simply does not give rise to a RICO claim, and that is yet another reason 

Plaintiffs’ RICO claims must fail. 

This Court should reject Plaintiffs’ effort to radically expand the RICO statute to include 

“garden variety” workers compensation disputes like the one here. Any other result would lead 

to a flood of RICO actions by disappointed workers compensation insurance claimants.

Even if RICO applied under these circumstances, Plaintiffs’ claims would still fail as a 

matter of law because Plaintiffs have not alleged – and cannot allege – the essential elements of 

any of their claims. Plaintiffs assert a RICO claim for violation 18 U.S.C. 1962(a) but fail to 

plead the required element that they suffered a distinct injury as a result of Coke’s investment of 

the proceeds of racketeering activity. Plaintiffs assert a second RICO claim for violation of 18 

U.S.C. 1962(b) but fail to plead the required elements that Coke acquired or maintained control 

of an enterprise through a pattern of racketeering activity and that they (Plaintiffs) suffered a 

distinct injury as a result of this conduct by Coke. Plaintiffs assert a final RICO claim for 

violation of 18 U.S.C. 1962(c) but fail to sufficiently allege that Coke was part of an enterprise, 

that Coke participated in the affairs of an alleged enterprise, and that Coke committed two or 

more predicate acts of mail or wire fraud.

Plaintiffs’ first response to all of these arguments will surely be that the United States 

Court of Appeals for the Sixth Circuit recently “recognized [their RICO] cause of action” in 

Brown v. Cassens Transport Co., 546 F.3d 347 (6th Cir. 2008). (Pls. RICO Case Statement at 

Question 20, page 14.) But the Sixth Circuit did no such thing in Brown. It simply rejected the

specific challenges raised by the defendants in that action – challenges that differ from those 

raised here. Brown does not open the door to this Court for these Plaintiffs.

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THE NATURE OF PLAINTIFFS’ CLAIMS

Plaintiffs are current or former employees of Coke. (Compl. at 4.)1 Coke provided 

Plaintiffs with workers compensation disability insurance. (Id. at ¶6.) Coke hired Sedgwick 

Claims Management Services, Inc. (“Sedgwick”) to adjust and administer disability claims by 

Plaintiffs and other Coke employees. (Id.) Plaintiffs submitted claims for continuing disability 

benefits based upon purportedly disabling work-related injuries. Plaintiff Scharntizke initially

received benefits, which were later “cut off,” and Plaintiff Jackson’s request for benefits was 

denied. (Id. at 31(A) and 31(B).)

Plaintiffs allege that they were denied continuing benefits as the result of an alleged farreaching fraudulent conspiracy between Defendants Coke, Sedgwick, and Dr. Paul Drouillard, a 

physician engaged by Sedgwick to conduct medical examinations of claimants. Plaintiffs insist 

that Coke and/or Sedgwick (1) directed claimants like them to obtain an “independent” medical 

examination from Dr. Drouillard knowing that the doctor was not independent and that he would 

find essentially all claimants able to work and then (2) used Dr. Drouillard’s reports as a basis for 

denying or terminating benefits to which the claimants were entitled. (See generally id. at ¶¶12-

15.) According to Plaintiffs, the Defendants’ fraudulent conduct violated duties that Defendants 

owed to Plaintiffs under the Workers Disability Compensation Act, MCL 418.101 et. seq., and 

under the Michigan Uniform Trade Practices Act, MCL 500.2001, et. seq. (Id. at ¶¶16-17.)

Plaintiffs allege that Defendants may be held liable for their breaches of these Michigan 

statutes under the federal RICO statute, 18 U.S.C. 1964(1) (creating civil action for substantial 

RICO violations). Specifically, Plaintiffs allege that Defendants’ conduct violated 18 U.S.C. 

1 Because this is a motion under Fed.R.Civ.P. 12(b)(6), Coke takes Plaintiffs’ allegations as true, 

as it must. By reciting the allegations above, Coke does not mean to indicate that it accepts any 

of them as true.

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1962(a) (prohibiting investment of income derived from racketeering activity), 18 U.S.C. 

1962(b) (prohibiting acquiring or maintaining an interest in an enterprise through a pattern of 

racketeering activity), and 18 U.S.C. 1962(c) (prohibiting participating in the affairs of an 

enterprise through a pattern of racketeering activity). (Id. at ¶¶24, 26.)

But Plaintiffs acknowledge that they do not yet have any actual evidence that Coke 

conspired with anyone about anything: their key allegations are all “based on information and 

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

and discovery.” (See, e.g., id. at ¶8 (allegation concerning how decisions on claims were made); 

¶9 (enterprise allegations); ¶15 (fraud allegations); ¶16 (same).) Likewise, Plaintiffs do not 

know what role, if any, Coke played in the process through which their claims were adjusted and 

denied, and thus they allege a number of different theories as to Coke’s possible role(s): 

“Decisions regarding paying or denying Michigan workers compensation claims, and selecting 

doctors to do medical examinations of claimants, were made by Sedgwick and/or Coke, or by

Sedgwick after consulting with Coke and with workers compensation defense attorneys, or were 

ratified by Coke after being made by Sedgwick in consultation with workers compensation 

attorneys.” (Id. at ¶8.)

Coke now moves to dismiss Plaintiff’s claims under Fed.R.Civ.P. 12(b)(1) & (b)(6).

GOVERNING LEGAL STANDARD

Coke seeks dismissal of Plaintiffs’ claims pursuant to Fed.R.Civ.P. 12(b)(1) & (b)(6). 

The governing standards under these rules are well-known to this court and, in order to save 

space, will not be repeated here. See High v. Capital Senior Living Properties – 2, Heatherwood, 

Inc., 594 F.Supp.2d 789, 796 (E.D. Mich. 2008) (Lawson, J.) (stating standards under both Rules

12(b)(1) & 12(b)(6)).

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ARGUMENT

I. PLAINTIFFS’ RICO CLAIMS ALL FAIL AS A MATTER OF LAW BECAUSE 

THE RICO STATUTE DOES NOT PROVIDE A REMEDY FOR THE 

ALLEGEDLY FRAUDULENT DENIAL OF WORKERS COMPENSATION 

BENEFITS

In their RICO claims, Plaintiffs allege that Coke violated duties owed to them “under the 

Michigan Workers Disability Compensation Act” and “under the Michigan Uniform Trade 

Practices Act.” (Compl. at ¶¶16-17.) But Coke did not owe Plaintiffs any duties under the 

Uniform Trade Practices Act, see Blackwell v. Citizens Ins. Co., 457 Mich. 662, 893-94, 579 

N.W.2d 889 (1998) (“the duties outlined in the UTPA run to [an] employer rather than [to an] 

employee”)2, and thus the only duties on which Plaintiffs’ claims can possibly be based are 

duties created by the WDCA. Plaintiffs claim that Coke fraudulently breached its duties under 

that Act “to be honest in the administration of a workers compensation claim” and “not to 

unreasonably fail to pay promptly claims for compensation for which [they] shall become 

liable.” (Id.) But the federal courts have consistently rejected RICO claims arising out of alleged 

fraudulent violations of duties created by statutes like the WDCA. 

These courts have offered two rationales for their decisions: first, that a plaintiff may not

assert a RICO claim based upon the violation of a statutory duty where the statute that creates the 

2

The UTPA, itself, makes absolutely clear that the WDCA, not the UTPA, governs claims based 

upon the alleged non-payment of workers compensation benefits. Sections 2006(1) and (4) of

the UTPA, MCL 500.2006(1) & (4), address the untimely payment of benefits and provide that a 

carrier must pay 12% interest per annum where it fails to timely pay benefits that are not 

reasonably in dispute. But Section 2006(6) of the UTPA, MCL 500.2006(6), states that as 

between the UTPA and the WDCA, the WDCA controls. As described in detail, infra at pp. 8-9, 

the WDCA places strict limits on liability for the non-payment of benefits. Thus, with respect to 

issues concerning non-payment of benefits and the consequences for non-payment, the WDCA 

controls, and the UTPA does not apply. Finally, Plaintiffs rely on Section 2026 of the UTPA, 

MCL 500.2026, but that section applies to “the business of insurance,” and the Sixth Circuit 

recently held that the relationship between an employer, its workers compensation insurance 

adjuster, and an injured employee is not “the business of insurance” – a result invited by counsel 

for Plaintiffs in this action. Brown v. Cassens, 546 F.3d 347 (6th Cir. 2008). Plaintiffs cannot 

have it both ways. 

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duty also (a) establishes a specialized administrative scheme to enforce and regulate the duty and 

(b) prescribes an exclusive administrative remedy for breach of the duty, see, e.g., Miller v. 

Norfolk Southern Railway, 183 F.Supp.2d 996, 1000 (N.D. Ohio 2002) (dismissing RICO claim 

based upon allegedly fraudulent violation of employees’ rights under Railway Labor Act); and,

second, that the breach of administrative duties created by statutes like the WDCA – even when 

fraudulent – does not amount to mail or wire fraud sufficient to give rise to RICO liability. See, 

e.g., Ayres v. General Motors Corp., 234 F.3d 514, 521-22 (11th Cir. 2000) (dismissing RICO 

claim based upon allegedly fraudulent violation of the National Traffic and Motor Vehicle Safety 

Act). Both of these rationales for denying RICO claims are present here, and thus this Court 

should dismiss Plaintiffs’ RICO complaint.

A. Plaintiffs May Not Use RICO to Avoid Michigan’s Comprehensive and 

Exclusive Administrative Procedures Under the WDCA That Are 

Specifically Designed to Adjudicate Whether Workers Compensation 

Benefits Have Been Properly Denied

RICO cannot be used as an “end run” around a specialized and exclusive administrative 

regime that is established in order to determine whether statutory duties have been violated and 

to address violations of those duties. That is precisely why so many federal courts have 

dismissed RICO claims that, like Plaintiffs’ claims here, attempt to bypass comprehensive and 

exclusive administrative schemes and remedies. The decision in Danielsen v. Burnside-Ott 

Aviation, 746 F.Supp. 170, 176 (D.D.C. 1990), aff’d 941 F.2d 1220 (D.C. Cir. 1991), 

exemplifies these decisions. The plaintiffs in Danielsen alleged that the defendants “engaged in 

a scheme to defraud employees of the minimum wages and fringe benefits to which they were 

entitled” under the McNamara-O’Hara Services Contract Act, 41 U.S.C. 351, et. seq. (“SCA”). 

Danielsen, 746 F.Supp. at 171. Even though the plaintiffs had no private right of action directly

under the SCA, and even though federal law assigned to the Department of Labor the exclusive 

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authority to address violations of the SCA, the plaintiffs brought a RICO claim based upon the 

alleged SCA violations. The court rejected the plaintiffs’ effort to convert the alleged SCA 

violations into a RICO claim:

Here, the fraudulent scheme alleged by the plaintiffs is an underpayment of wages 

and fringe benefits due them pursuant to the SCA. Plaintiffs' RICO claims are all 

premised on alleged violations of the SCA. However, the SCA expressly assigns 

the responsibility for determining and enforcing wage levels and other employee 

benefits to DOL. Allowing plaintiffs to proceed with their RICO claims would not 

only upset the careful blend of administrative and judicial powers that Congress 

has created under the SCA, but also overturn well-established precedent that 

employees have no private right of action under the Act.

Id. at 176.

3 On appeal, the D.C. Circuit affirmed. Danielsen, 941 F.2d 1220. It stressed that 

allowing the plaintiffs’ RICO claim to proceed would lead to a patently absurd result: namely,

that notwithstanding the bar against private actions seeking compensation for violations of the 

SCA, a plaintiff could pursue a RICO claim and seek three times its damages plus attorneys fees 

for a violation of the Act. Id. at 1228-29. 

The federal court in Livingston v. Shore Slurry Seal, Inc., 98 F.Supp.2d 594 (D.N.J. 

2000), likewise dismissed a RICO claim based upon violations of a comprehensive statute that 

created exclusive administrative procedures to remedy violations. The plaintiffs in Livingston

alleged that the defendants had violated the Davis-Bacon Act, 40 U.S.C. §276a et. seq., by 

fraudulently failing to pay employees the prevailing wage on public contracts. Even though the 

Davis-Bacon Act established a detailed administrative scheme to enforce violations of its 

provisions, Plaintiffs brought a RICO claim. The court rejected Plaintiffs’ attempt to convert 

their dispute into a RICO case. The court explained that “because the gravamen of plaintiffs’ 

3

The district court in Danielsen used the term “preemption” to describe how the administrative 

scheme took precedence over the RICO claim. Danielsen, 746 F.Supp. at 176. On appeal, the 

D.C. Circuit said the issue is best described as one of exclusive remedy rather than preemption 

but added that the label is not critical. Danielsen, 941 F.2d at 1226-27. 

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Amended Complaint is that they were paid less than the prevailing wage in violation of the 

Davis-Bacon Act,” they could pursue their claim only through “the detailed administrative 

scheme created by the [Davis-Bacon] Act,” and not through a RICO cause of action. Id. at 600.

The court cited Danielsen and stressed that the reasoning of Danielsen “has been adopted by 

[many] courts and applied to [many] statutes other than” the Davis-Bacon Act. Id. at 601 

(collecting cases barring RICO claims in a wide variety of contexts).

The reasoning of Danielsen and Livingston applies here and requires dismissal of 

Plaintiffs’ RICO claims. Like the statutes at issue in those cases, the WDCA establishes a 

“comprehensive” and exclusive administrative scheme that governs every aspect of workers 

compensation benefits, including the adjudication of whether a claimant is entitled to such 

benefits. See Moon v. Harrison Piping Supply, 375 F. Supp. 2d 577, 589 (E.D. Mich 2005), aff’d

in part rev’d in part, 465 F.3d 719 (6th Cir. 2006). The WDCA first provides for review of a 

disputed claim by a mediator or at a hearing before workers compensation magistrate, MCL 

418.847, and then allows for review of the magistrate’s decision by the Workers Compensation 

Appellate Commission, MCL 418.859(a), and for subsequent judicial review of that decision. 

MCL 418.861(a). An injured employee seeking workers compensation must utilize this 

comprehensive administrative process established by the WDCA and has no private right of 

action to recover benefits; the administrative procedures under the WDCA are his “exclusive 

remedy.” MCL 418.131; see also Gray v. Morley, 460 Mich. 738, 741, 596 N.W.2d (1999).

Not only does the WDCA provide the exclusive remedy for an employee seeking 

benefits, it provides the exclusive remedy for an employee claiming that his employer/insurer 

failed to pay benefits in bad faith. The Act provides that a disability insurer must pay a penalty 

$50.00 per day if, in the absence of a dispute over the claimant’s entitlement to benefits, it fails 

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to pay benefits within 30 days of when they become due and owing. MCL §418.801(2). And, 

the Act strictly limits the total penalty to $1500.00. Id. The Michigan Court of Appeals has 

twice held that an employee may not recover more than the specified limit – even where an 

employer disputes a claim for benefits in bad faith. See Warner v. Collavino Bros., 133 Mich. 

App. 230, 236-37, 347 N.W.2d 787 (1984) (affirming administrative ruling that “an employer 

[who] disputed a claim in bad faith will not justify the assessing of a penalty [beyond the limited 

penalty set forth in the WDCA] against the employer.”); Couture v. General Motors Corp., 125 

Mich. App. 174, 335 N.W.2d 668 (1983) (reversing administrative award of penalty damages 

[above the statutory limit] because the Legislature specifically intended to limit liability for all 

failures to pay benefits – even those in “bad faith”).4

Allowing Plaintiffs’ RICO claims to proceed here would create the type of absurd result 

that the courts in Danielsen and Livingston sought to avoid: allowing plaintiffs to sue for treble 

damages and attorneys fees for the violation of a statute (the WDCA) that does not create a 

private right of action, requires the use of administrative remedies, and which strictly limits 

liability. RICO was never intended to create a path into court for litigants who would otherwise 

be limited to exclusive administrative remedies and procedures and would be subject to strict 

damages limitations. Simply put, Plaintiffs here “should not be able to avoid [the workers 

compensation administrative tribunal’s exclusive] jurisdiction or the designated remedial scheme 

[under the WDCA] by asserting a RICO claim....” Miller, 183 F.Supp.2d at 1000 (dismissing

4

In Brown, the Sixth Circuit said that allowing a RICO claim against a disability insurer that 

disputes a claim for benefits in bad faith would not impair Michigan’s workers compensation 

disability insurance regime because there is “no authority” that Michigan “has a policy of limited 

liability for employers even when they fraudulently deny workers compensation benefits.” 

Brown, 546 F.3d at 363. This statement was dicta because it came after the court had already 

rejected the argument to which this statement is relevant. Id. at 358-60. More importantly, the 

statement is wrong – as evidenced by the Couture and Warner cases cited above.

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RICO claim based upon allegedly fraudulent violation of employee’s rights under the Railway

Labor Act).5

Indeed, the case for dismissal here is even stronger than in Danielsen and Livingston

because the statutory and administrative regimes Plaintiffs seek to displace are state (rather than 

federal) regimes. The same Congress that was unwilling to allow RICO to intrude into federal 

administrative schemes surely could not have intended to take the even more intrusive step of 

having RICO override and interfere with administrative statutes and duties that are wholly 

creatures of state law. Indeed, allowing a RICO claim – with its treble damages – to proceed 

here would directly undermine the State of Michigan’s decision to strictly limit an employer’s 

liability for disputing benefits claims. Congress could not have intended that RICO would work 

such a radical change in state workers compensation law.

More to the point, Congress has clearly expressed its intention to limit federal jurisdiction 

over claims related to alleged violations of state workers compensation statutes. Congress 

expressed this intent in 28 U.S.C. 1445(c), which prohibits removal of any civil action “arising 

5

The leading Sixth Circuit case addressing whether a RICO claim is “preempted” by, and must 

give way to, administrative procedures and remedies created by another statute is Trollinger v. 

Tyson Foods, Inc., 370 F.3d 602 (6th Cir. 2004). In that case, the court held that plaintiffs could 

pursue a RICO claim based upon predicate acts that were the unlawful harboring of illegal alien 

laborers in violation of the Immigration and Nationality Act (“INA”); the court rejected the 

argument that the claim was preempted under the so-called Garmon labor law pre-emption 

doctrine. But Trollinger is easily distinguishable from this case. Most importantly, the RICO 

statute specifically identified the violations of the INA at issue in Trollinger as predicate acts that 

could support a RICO claim, id. at 611-612, so there was no danger that the plaintiff was using 

RICO, contrary to Congress’ intent, to avoid exclusive administrative procedures and remedies 

established by other statutes. Moreover, Trollinger dealt narrowly with the Garmon pre-emption 

doctrine under the National Labor Relations Act; the type of “pre-emption” that Coke urges here 

(to the extent it can be called “pre-emption”) is not “Garmon pre-emption,” and is not limited to 

the National Labor Relations Act. Furthermore, Trollinger did not involve any potential federal 

interference with state-created statutory and administrative procedures and remedies. Finally, 

Trollinger did not involve an effort to radically expand the reach of RICO through an overly 

expansive construction of the mail and wire fraud statutes.

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under the workmen’s compensation laws” of the states. See Armisted v. C & M Transport, Inc., 

49 F.3d 43, 46 (1st Cir. 1995) (This statute “reflects a congressional concern for the states’

interest in administering their own workers’ compensation schemes....”). Although styled as 

RICO claims, Plaintiffs’ claims arise under the WDCA because (1) Plaintiffs’ entitlement to 

relief depends upon their allegation that they qualified for benefits under the WDCA, (2) the 

primary relief Plaintiffs seek is an award of benefits allegedly owing under the WDCA, and (3) 

as noted above, the WDCA provides a specific remedy for the alleged wrongful denial of 

benefits that Plaintiffs challenge here. See Harper v. Autoalliance Int’l Inc., 392 F.3d 195, 205-

06 (6th Cir. 2000) (identifying characteristics of claim that arises under state workers 

compensation laws). Plaintiffs’ claims are thus precisely the type of claims that Congress 

intended to keep out of the federal courts.6

B. The Allegedly-Fraudulent Violation of Duties Owed to Plaintiffs Under the 

WDCA Does Not Amount to Mail or Wire Fraud Sufficient to Trigger RICO 

Liability

Plaintiffs’ RICO claims rest upon two assumptions: (1) Defendants fraudulently breached

duties owed to them (Plaintiffs) under the WDCA – i.e., the duties to fairly and honestly evaluate 

their claims – and (2) Defendants’ fraudulent breach of those duties amounts to mail and/or wire 

fraud sufficient to trigger RICO liability. The first assumption is wrong as a matter of fact, but, 

more importantly for purposes of this motion, the second assumption is wrong as a matter of law. 

Even an allegedly-fraudulent breach of a legal duty does not amount to mail or wire fraud where, 

as in this case, (a) the breached duty is wholly a creature of statute, (b) the statute creating the 

6

Even though, strictly speaking, this action is not subject to 28 U.S.C. 1445(c) because it was 

not removed to this Court, that statute should guide this Court’s interpretation and application of 

the RICO statute. Indeed, it would make no sense to hold that Congress acted to limit federal 

jurisdiction over claims arising under state workers compensation laws through Section 1445(c) 

and then opened the doors of the federal courts to such claims via the RICO statute.

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duty establishes a specialized, comprehensive and exclusive administrative scheme to enforce the 

duty, and (c) the statute does not provide for a private right of action or criminal penalties.

The Eleventh Circuit’s decision in Ayres v. General Motors Corp., 234 F.3d 514 (11th

Cir. 2000), makes this very point. The plaintiffs in Ayres brought a claim against General 

Motors under the Georgia civil RICO statute. Plaintiffs alleged that General Motors committed a 

pattern of federal mail and wire fraud by fraudulently failing to disclose information that it 

(General Motors) was required to disclose under the National Traffic and Motor Vehicle Safety 

Act, 49 U.S.C. §30118, et. seq. The Eleventh Circuit assumed that General Motors had violated 

the statute as alleged by plaintiffs. But the court held that such a violation did not amount to 

mail fraud because the Safety Act “was not meant to create the kind of duty, a breach of which 

would create criminal liability or civil liability under RICO statutes.” Id. at 521-22. The court 

explained its decision in a passage worth quoting at length:

Thus, the crucial issue before us is whether a breach of such duty to disclose 

would constitute mail or wire fraud. For the reasons that follow, we conclude that 

the Safety Act was not meant to create the kind of duty, a breach of which would 

create criminal liability or civil liability under RICO statutes.

The Safety Act establishes its own extensive array of administrative remedies for 

a violation of its notification obligations.... [and] the Safety Act does not make 

violation of the notification requirements criminal. In light of this extensive 

administrative scheme, we think it clear that Congress did not intend to equate a 

violation of the Safety Act's notification requirements in and of itself with the 

felony of mail or wire fraud. Moreover, given the limits on the civil penalties, the 

absence of a private right of action, and the option of private parties to petition for 

administrative action, it is also clear that Congress did not intend for a violation of 

the Safety Act's notification requirements to be the basis for a private civil RICO 

action, which would permit unlimited, treble damages.

* * *

Given the extensive array of administrative remedies for violation of the Safety 

Act, including specific provisions for participation by “any interested person,” 

and given the specific provision for the civil enforcement action by the Attorney 

General with no mention of a corresponding private cause of action, and given the 

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limits on the civil penalties and lack of criminal penalties, and finally given the 

absence of a private cause of action, we conclude that Congress did not intend for 

a violation of the Safety Act's notification requirement to constitute the crime of

mail or wire fraud. It follows that Congress did not intend for a violation of the 

Safety Act to be the basis for a private civil RICO action, which would permit 

unlimited, trebled damages. 

***

To permit plaintiffs to convert non-compliance with the notification requirement 

found in the Safety Act, a regulatory statute with its own administrative remedies, 

into mail and wire fraud and thereby to maintain a civil RICO action would upset 

the purposes and contradict the intent of the statute.

Id. at 522 - 525. See also Danielsen, 941 F.2d at 1229 (expressing “doubt” that an allegedlyfraudulent violation of the SCA could amount to mail fraud sufficient to trigger RICO liability); 

McCulloch v. PNC Bank, 298 F.3d 1217, 1226-26 (11th Cir. 2002) (affirming dismissal of RICO 

claim and holding that allegedly fraudulent violations of the Higher Education Act did not give 

rise to mail fraud or wire fraud liability sufficient to state a RICO claim).

Like the statute at issue in Ayres, the WDCA “was not meant to create the kind of duty, a 

breach of which would create criminal liability or civil liability under RICO statutes.” Ayres, 234 

F.3d at 522. Like that statute, the WDCA “establishes its own extensive array of administrative 

remedies for a violation” of the duty to pay claims. Id. For instance, as noted above, the WDCA 

requires insurers to pay penalties when they wrongly fail to pay claims. MCL 418.801(2). The 

WDCA further provides that the unreasonable failure to pay claims may lead to revocation of the 

insurer’s license or to a self-insured employer’s loss of self-insured status. MCL 418.631(1) & 

(2). Moreover, an injured employee does not have a private right of action under the WDCA; on 

the contrary, the WDCA abolished an employee’s right to sue and required injured employees to 

pursue administrative remedies under the Act. See MCL 418.131. Furthermore, the WDCA does 

not provide for criminal penalties for violations of the duties it imposes; on the contrary, as noted 

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above, the WDCA contains a strict limitation of liability that applies even where an 

insurer/employer disputes a claim in bad faith. In short, the WDCA and the duties and remedies

it creates are exactly like the statutes and duties at issue in Ayres, the violation of which does not 

give rise to RICO liability. Thus, even if Defendants fraudulently violated the WDCA, they may

not be held liable under the RICO statute. 

II. PLAINTIFFS HAVE FAILED TO STATE A VIABLE CLAIM AGAINST COKE 

UNDER 18 U.S.C. 1962(A) BECAUSE THEY HAVE NOT ALLEGED AN INJURY 

STEMMING FROM COKE’S USE OR INVESTMENT OF ILLEGALLY 

OBTAINED INCOME

Plaintiffs seek to hold Coke liable for violation 18 U.S.C. 1962(a). This statute provides:

It shall be unlawful for any person who has received any income derived, directly 

or indirectly, from a pattern of racketeering activity ... to use or invest, directly or 

indirectly, any part of such income, in acquisition of any interest in, or the 

establishment or operation of, any enterprise which is engaged in, or the activities 

of which affect, interstate of foreign commerce.

In order to state a viable claim for violation of this statute, a plaintiff must allege “injuries 

stemming directly from the defendant’s alleged use or investment of their illegally obtained 

income.” Craighead v. E. F. Hutton Co., Inc., 899 F.2d 485, 494 (6th Cir. 1990). The alleged 

injuries necessary to support a claim under Section 1962(a) must be “separate” from the “injuries 

traceable to the alleged predicate acts.” Id. Thus, in Craighead, the Sixth Circuit affirmed 

dismissal of a claim under Section 1962(a) where the plaintiff alleged only injuries suffered as a 

result of the defendant’s purported securities fraud but failed to allege any additional injury

traceable to the defendant’s investment of the fraud proceeds. See also Eby v. Producers Co-Op, 

Inc., 959 F.Supp. 428, 432-33 (W.D. Mich. 1997) (dismissing claim under Section 1962(a) 

because plaintiff alleged only injuries traceable to the predicate acts of fraud and did not 

sufficiently plead an injury traceable to the defendant’s use or investment of fraud proceeds).

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Here, Plaintiffs insist that their injuries were caused entirely by the alleged predicate acts

of mail fraud and wire fraud; they do not identify any injury that flowed from any alleged use or 

investment of the fraud proceeds. For instance, their RICO Case Statement describes their 

damages as follows: “By cutting off or denying workers compensation benefits, defendants took 

money out of plaintiff’s pockets – their weekly benefits. Defendants deprived plaintiffs of 

medical treatment for their work-related injuries.” (Pls.’ RICO Case Statement at question 16, 

page 13.) Simply put, all of Plaintiffs’ claimed injuries flow directly and solely from the alleged 

predicate acts of fraud (i.e., from the purported bad faith denial of the Plaintiffs’ claims for 

benefits), not from Defendants’ alleged use or investment of the proceeds of the alleged fraud. 

Thus, Plaintiffs’ claim under Section 1962(a) fails as a matter of law.7

III. PLAINTIFFS HAVE FAILED TO STATE A VIABLE CLAIM AGAINST COKE 

UNDER 18 U.S.C. 1962(B) BECAUSE THEY HAVE FAILED TO ALLEGE (A) 

THAT COKE OBTAINED OR MAINTAINED CONTROL OF ANY INTEREST 

IN AN ENTERPRISE THROUGH A PATTERN OF RACKETEERING 

ACTIVITY AND (B) THAT THEY WERE INJURED AS A RESULT OF COKE’S 

ACQUISITION OR CONTROL OF ANY INTEREST IN ANY ENTERPRISE

Plaintiffs seek to hold Coke liable for violation 18 U.S.C. 1962(b). This statute provides:

It shall be unlawful for any person through a pattern of racketeering activity or 

through collection of an unlawful debt to acquire or maintain, directly or 

indirectly, any interest in or control of any enterprise which is engaged in, or the 

activities of which affect, interstate commerce.

7

Plaintiffs do allege that “monies received from the pattern of racketeering activity alleged 

herein ... were used or invested in the operation of the RICO enterprise ... which proximately 

injured plaintiffs as alleged herein.” (Compl. at ¶24.) But a “conclusory allegation [like this] that 

Defendants ‘used or invested’ income received from [racketeering activity] is insufficient 

because it fails to allege how that use or investment” caused Plaintiffs’ any injury. Katzman v. 

Victoria’s Secret Catalogue, 167 F.R.D. 649, 657 (S.D.N.Y. 1996) (dismissing claim under 

Section 1962(a)), aff’d 113 F.3d 1229 (2nd Cir. 1997); In Re Teledyine Def. Contracting Deriv. 

Litig., 849 F.Supp. 1369, 1373 (C.D. Cal. 1993) (“The Court finds that as to the requirement of 

pleading injury by reason of violation of §1962(a) ... Plaintiffs’ allegations are general, 

conclusory, and vague and therefore do not state a claim....”)

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In order to state a viable claim for violation of this statute, a plaintiff must allege that the 

defendant “acquire[d] or maintain[ed] an interest in, or control of, an enterprise through (or by

way of) the pattern of racketeering activity.” Advocacy Org. for Patients v. Auto Club Ins. Co., 

176 F.3d 315, 328 (6th Cir. 1999) (emphasis in original). It is not enough to allege that the 

defendants “associated together in order to engage in the pattern of racketeering activity....” Id. 

(Emphasis in original.) Moreover, a plaintiff must specifically allege “how” the defendants 

“acquired or maintained an interest in or control of the enterprise ... through the alleged 

racketeering activity....” Id. at 329.

Plaintiffs’ Complaint does not contain a single specific allegation about how Coke 

allegedly acquired or maintained control of the alleged enterprise through the purported 

racketeering activity. Indeed, the sole allegation in the Complaint that even arguably relates to 

Section 1962(b) is the statement in paragraph 24 that Coke used proceeds of alleged mail and 

wire fraud “to maintain control of any RICO enterprise....” In their RICO Case Statement 

Plaintiffs add only that “Coke and Sedwick control the enterprise.” (Pls.’ RICO Case Statement 

at question 12, page 12.) The Sixth Circuit has squarely held that such conclusory allegations –

which are “nothing more than a conclusion” and which contain “no facts” – cannot support a 

viable claim for violation of Section 1962(b). Id. at 329.

Moreover, Plaintiffs have failed to adequately allege that Coke acquired or maintained an 

“interest” in, or “control” over, any enterprise. For purposes of Section 1962(b), an “interest” is 

“not just any ‘interest’ but a proprietary one, such as the acquisition of stock, and the ‘control’ 

contemplated is the power gained over an enterprise’s operations by acquiring such interest.” 

Whaley v. Auto Club Ins. Assoc., 891 F.Supp. 1237, 1240-41 (E.D. Mich. 1995). Plaintiffs 

nowhere allege, because they cannot, that Coke acquired any proprietary interest in the alleged 

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enterprise and/or exercised control over the enterprise through such interest, and those failures 

require dismissal of their claim under Section 1962(b). Id. (dismissing claim under Section 

1962(b) because plaintiff failed to allege that defendant acquired a proprietary interest in the 

alleged enterprise).

Plaintiffs’ claim under Section 1962(b) suffers from yet another “fatal” flaw: Plaintiffs’

failure to allege that they were injured by Coke’s alleged acquisition or maintenance of control 

over the enterprise. Id. Indeed, the Sixth Circuit requires dismissal of claims under Section 

1962(a) that do not allege an injury “beyond that resulting from the fraud which constituted the 

predicate act.” Advocacy Org. for Patients, 176 F.3d at 329. (emphasis in original) (quoting 

Compagnie De Reassurance D’Ile De France v. New England Reinsurance Corp., 57 F.3d 56, 

92 (1st Cir. 1995)). As described in detail above, Plaintiffs do not plead any facts that, if proven, 

would establish that they suffered any injury over and above the injury they claim to have 

suffered from the purported fraudulent denial of benefits. Thus, their claim under Section 

1962(b) should be dismissed.

IV. PLAINTIFFS HAVE FAILED TO STATE A VIABLE CLAIM AGAINST COKE 

UNDER 18 U.S.C. 1962(C) BECAUSE (A) THEY HAVE FAILED TO ALLEGE 

THAT COKE WAS PART OF, AND/OR CONTROLLED OR MANAGED THE 

AFFAIRS OF, THE ALLEGED ENTERPRISE AND (B) THEY HAVE FAILED 

TO ALLEGE THAT COKE PARTICIPATED IN THE AFFAIRS OF THE 

ALLEGED ENTERPRISE THROUGH A PATTERN OF RACKETEERING 

ACTIVITY

Plaintiffs seek to hold Coke liable for violation 18 U.S.C. 1962(c). This statute provides 

in relevant part:

It shall be unlawful for any person employed by or associated with any enterprise 

engaged in, or the activities of which affect, interstate or foreign commerce, to 

conduct or participate, directly or indirectly, in the conduct of such enterprise’s 

affairs through a pattern of racketeering activity....

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In order to state a viable claim under this statute, a plaintiff must allege “that (1) the 

defendant (2) through the commission of two or more acts, (3) constituting a ‘pattern’ (4) of 

‘racketeering activity,’ (5) ... participates in (6) an ‘enterprise’ (7) the activities of which affect 

interstate commerce.” Armbruster v. K-H Corp., 206 F.Supp.2d 870, 896 (E.D. Mich. 2002).

Here, Plaintiffs claim under the statute fails because they have not sufficiently alleged that the 

Defendants formed an enterprise, that Coke participated in the affairs of the enterprise, and/or 

that Coke engaged in a pattern of racketeering activity.

First, as Co-Defendant Paul Drouillard argued in his motion to dismiss, Plaintiffs have 

failed to plead that Coke and the other Defendants formed an enterprise. (See Def. Drouillard’s 

Br. in Supp. of Mot. to Dismiss at 17-19.) Coke adopts Dr. Drouillard’s arguments on the 

enterprise issue and urges the Court to dismiss on the ground that Plaintiffs have failed to allege 

the existence of an enterprise separate and apart from the alleged pattern of racketeering activity.

Second, even if Plaintiffs have sufficiently alleged the existence of an enterprise, they 

have failed to properly plead that Coke participated in the enterprise’s affairs. The 

“participation” required by the statute equates to an operational or management role in the 

enterprise. Reves v. Ernst & Young, 507 U.S. 170, 185 (1993). Plaintiffs have not identified any 

such role played by Coke. On the contrary, they allege that the primary purpose and focus of the 

alleged enterprise was the denial of worker’s compensation claims submitted by Coke 

employees, and they admit that Coke did not handle the claims submitted by its employees. 

(Compl. at ¶¶6-7.) Instead, Coke hired Sedgwick to adjust the claims. (Id.) Nor have Plaintiffs 

sufficiently alleged that Coke played an active role in denying the claims in question. The most 

they say is that the denials “were made by Sedgwick and/or Coke, or by Sedgwick after 

consulting with Coke and with workers compensation attorneys, or were ratified by Coke after 

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being made by Sedgwick in consultation with its workers compensation attorneys.” (Id. at ¶8.)

This allegation stretches the bounds of “pleading in the alternative” beyond all reasonable limits 

and lays bare Plaintiffs’ inability to allege specific facts that, if proven, would establish that 

Coke managed or operated the alleged enterprise.

Finally, Plaintiffs were required to allege that Coke itself committed specific predicate 

acts constituting a pattern of racketeering activity, but Plaintiffs failed to do so. As the Supreme 

Court has explained, a plaintiff “has a claim” for a violation of Section 1962(c) where “the 

defendant engages in a pattern of racketeering activity in a manner forbidden by [the statute] 

....” Sedima, S.P.R.L. v. IMREX Co., Inc., 473 U.S. 479, 495 (1985) (emphasis added). Thus, a 

plaintiff must specifically identify the predicate acts by each defendant the plaintiff seeks to hold 

liable under the statute. The requirement that a plaintiff plead sufficient predicate acts by each 

defendant comes directly from the plain language of the statute which makes a defendant liable 

only where it actually participates in the affairs of an enterprise through a pattern of racketeering 

activity (i.e., a pattern of predicate acts).8

Neither Plaintiff in this action carried his burden of pleading predicate acts by Coke. 

Plaintiffs identify the alleged predicate acts in paragraph 31 of the Complaint. That paragraph 

begins by alleging that “Coke and Sedgwick or their agents” committed fraudulent mailings and 

wirings, but it specifically identifies only mailings by Sedgwick and Dr. Drouillard. (Compl. at 

8

In Moon, supra, Judge Borman concluded that a plaintiff need not plead predicate acts by each 

defendant individually. Coke respectfully suggests that Judge Borman erred on this point. His 

ruling cannot be reconciled with the plain language of the statute which imposes liability only for 

actual participation in an enterprise through a pattern of racketeering activity. Judge Borman 

held that it was sufficient if a plaintiff alleged that a defendant aided and abetted the commission 

of a predicate act. But this ignores that Congress specifically provided for aiding and abetting 

liability in some provisions of the RICO statute, see, e.g., 18 U.S.C. 1962(a) (expressly

incorporating aiding and abetting statute, 18 U.S.C. 2), but not in Section 1962(c) of the statute. 

The omission of aiding and abetting language from Section 1962(c) underscores that a plaintiff 

must specifically identify the predicate acts that each defendant actually committed.

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¶31.) Paragraph 31(A) of the Complaint deals specifically with Plaintiff Jackson, and it does not 

identify any mailings or wirings by Coke. Paragraph 31(B) deals specifically with Plaintiff 

Scharnitzke, and it identifies, at most, one mailing by Coke on or about July 22, 2008. A RICO 

claim under Section 1962(c) requires the commission of at least two predicate acts by the 

defendant, and thus the single alleged mailing identified in paragraph 31(B) is insufficient to 

state a valid claim under the statute. See VanDenBroeck v. CommonPoint Mortage Co., 210 F.3d 

696, 699 (6th Cir. 2000). Elsewhere in the Complaint, Plaintiffs generally allege that Coke 

committed unspecified mail and wire fraud (see, e.g., Compl. at ¶¶20(C), 23), but these 

allegations cannot save Plaintiffs’ claim under Section 1962(c) because alleged predicate acts of 

mail and wire fraud must be pleaded with particularity. See Advocacy Org. for Patients and 

Providers, 176 F.3d at 322. Plaintiffs have not stated a viable claim under Section 1962(c).

CONCLUSION

This dispute belongs before Michigan’s administrative workers compensation tribunal, 

not before this Court. For all of the reasons explained above and in Dr. Drouillard’s motion to 

dismiss, this Court should dismiss Plaintiffs’ RICO claims and require Plaintiffs to comply with 

the governing Michigan law which addresses challenges to denials of workers compensation 

benefits. In the alternative, this Court should stay this action pending final review of Plaintiffs’ 

pending administrative challenges to the denials of their benefits.

Respectfully submitted,

MILLER, CANFIELD, PADDOCK AND STONE, P.L.C.

By: s/Matthew F. Leitman

Thomas W. Cranmer (P25252)

Matthew F. Leitman (P48999)

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

cranmer@millercanfield.com

leitman@millercanfield.com

Dated: July 15, 2009 Attorneys for Defendant Coca-Cola Enterprises, Inc.

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BHLIB:665077.6\108128-00008 1

CERTIFICATE OF SERVICE

I hereby certify that on July 15, 2009, I electronically filed the foregoing document, with 

the Clerk of the court using the ECF system which sent notification of such filing to the 

following: 

· Katherine D. Goudie: goudie@butzel.com, ponce@butzel.com 

· Marshall D. Lasser: mlasserlaw@aol.com, ddtalon@gmail.com 

· Lynn A. Sheehy: sheehy@butzel.com, skarbek@butzel.com 

· Daniel B. Tukel: tukel@butzel.com, bobak@butzel.com

and hereby certify that I have mailed by United States Postal Service the paper to the following 

non-ECF participants:

None.

Dated: July 15, 2009 s/Matthew F. Leitman

Thomas W. Cranmer (P25252)

Matthew F. Leitman (P48999)

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

840 West Long Lake Road, Suite 200

Troy, Michigan 48098

Telephone: (248) 879-2000

cranmer@millercanfield.com

leitman@millercanfield.com

Attorneys for Defendant Coca-Cola Enterprises, Inc.

2:09-cv-11529-NGE-VMM Doc # 21 Filed 07/15/09 Pg 30 of 30 Pg ID 287