In the Supreme Court of the United States

Transcription

1 NO In the Supreme Court of the United States CLIFTON E. JACKSON, CHRISTOPHER M. SCHARNITZKE, on behalf of themselves and all other persons similarly situated, Petitioners, v. SEDGWICK CLAIMS MANAGEMENT SERVICES, INC., COCA-COLA ENTERPRISES, INC., foreign corporations, DR. PAUL DROUILLARD, jointly and severally, Respondents. On Petition for Writ of Certiorari to the United States Court of Appeals for the Sixth Circuit RESPONDENT DR. PAUL DROUILLARD S BRIEF IN OPPOSITION DANIEL B. TUKEL BUTZEL LONG PC 150 W. Jefferson Ave. Suite 100 Detroit, MI (313) MICHAEL F. SMITH Counsel of Record THE SMITH APPELLATE LAW FIRM 1747 Pennsylvania Ave. NW Suite 1025 Washington, D.C (202) smith@smithpllc.com Counsel for Respondent Dr. Paul Drouillard Becker Gallagher Cincinnati, OH Washington, D.C

2 i QUESTION PRESENTED Do claims arising from respondents allegedly fraudulent denial of petitioners State-law workerscompensation claims seek relief for damage to business or property, so as to provide standing under RICO, where they are inextricably intertwined with petitioners personal injuries?

3 ii PARTIES TO THE PROCEEDING In this case, petitioners are two individuals, Clifton E. Jackson and Christopher M. Scharnitzke, who were plaintiffs and appellants below. Respondents are: Dr. Paul Drouillard, an individual who is a board-certified orthopedic surgeon; Coca-Cola Enterprises, Inc.; and Sedgwick Claims Management Services, Inc.; they were defendants and appellees below.

4 iii TABLE OF CONTENTS Page QUESTION PRESENTED... PARTIES TO THE PROCEEDING... ii TABLE OF CONTENTS... TABLE OF AUTHORITIES... STATEMENT OF THE CASE... 1 REASONS FOR DENYING THE WRIT... 4 I. The ruling below was correct, and does not create a circuit split... 4 II. Due to its factual peculiarities and alternate bases for affirming dismissal, this case presents a poor vehicle with which to determine whether fraudulent benefit denials constitute injury to business or property CONCLUSION i iii iv

5 iv TABLE OF AUTHORITIES Page CASES Anza v. Ideal Steel Supply Corp., 547 U.S. 451 (2006)... 7 Bankers Trust Co. v. Rhoades, 741 F.2d 511 (2d Cir. 1984), vacated on other grounds, 473 U.S. 922 (1985)... 6 Bast v. Cohen, Dunn and Sinclair, PC, 59 F.3d 492 (4th Cir. 1995)... 5 Bougopoulos v. Altria Group, Inc., 954 F. Supp. 2d 54 (D.N.H. 2013)... 7 Briscoe v. LaHue, 460 U.S. 325 (1983)... 8 Brown v. Cassens Transport, Inc., 675 F.3d 946 (6th Cir. 2012)... 3, 4, 8 Butz v. Economou, 438 U.S. 478 (1978)... 9 Cassens Transport, Inc. v. Brown, 133 S. Ct (2013)... 3 Diaz v. Gates, 420 F.3d 897 (9th Cir. 2005)... 5, 6, 7 Doe v. Roe, 958 F.2d 763 (7th Cir. 1992)... 5, 7 Drake v. B.F. Goodrich Co., 782 F.2d 638 (6th Cir. 1986)... 5

6 v Evans v. City of Chicago, 434 F.3d 916 (7th Cir. 2006)... 5, 7 Filarsky v. Delia, 132 S. Ct (2012)... 9 Fleischhauer v. Felter, 879 F.2d 1290 (6th Cir. 1989)... 5 Grogan v. Platt, 835 F.2d 844 (11th Cir. 1988)... 4 Hamm v. Rhone-Poulenc Rorer Pharms., Inc., 187 F.3d 941 (8th Cir. 1999)... 5 Hill v. Tangherlini, 724 F.3d 965 (7th Cir. 2013)... 5 Hughes v. Tobacco Inst., Inc., 278 F.3d 417 (5th Cir. 2001)... 5 Jackson v. NAACP, No , 2013 U.S. App. LEXIS (5th Cir. Oct. 8, 2013)... 7 Living Designs, Inc. v. E.I. du Pont de Nemours and Co., 431 F.3d 353 (9th Cir. 2005)... 5, 7 Mitchell v. Forsyth, 472 U.S. 511 (1985)... 9 Reiter v. Sonotone Corp., 442 U.S. 330 (1979)... 5, 7 STATUTES 18 U.S.C et seq... passim 18 U.S.C. 1962(c)... 9

7 vi RULES Fed. R. Civ. P. 12(b)(1)... 2 Fed. R. Civ. P. 12(b)(6)... 2 Sup. Ct. R

8 1 BRIEF IN OPPOSITION STATEMENT OF THE CASE Respondent Dr. Paul Drouillard is a board-certified orthopedic surgeon. He has an active surgical practice though which he provides direct patient care, and also performs independent medical examinations (IMEs) to assess individuals who make work-related medical claims. Petitioners Clifton E. Jackson and Christopher M. Scharnitzke are or were employees of defendant Coca- Cola Enterprises, Inc.; both received benefits under Michigan s Workers Disability Compensation Act (WDCA) that were discontinued after a period of time decisions with which Dr. Drouillard was not involved. In fact, the petition fails to note that Dr. Drouillard never examined Scharnitzke, never offered an opinion as to his medical condition, and never was asked to do either. Dr. Drouillard did render a medical opinion as to Jackson, of whom he performed an IME in January Pet. App. 10a. Coca-Cola is self-insured for WDCA claims, and defendant Sedgwick Claims Management Services, Inc. is its third-party administrator. Despite the continued pendency of their claims before the workers-compensation magistrate, Jackson and Scharnitzke filed this action in 2009 in the U.S. District Court for the Eastern District of Michigan, on behalf of themselves and others similarly situated. They alleged a scheme between Coca-Cola, Sedgwick,

9 2 and Dr. Drouillard to fraudulently deprive them of workers-compensation benefits, and sought recovery under the Racketeer Influenced and Corrupt Organization Act ( RICO ), 18 U.S.C et seq. (They also alleged a violation of the Michigan Unfair Trade Practices Act, but that claim was dismissed with the rest of their complaint and they did not challenge that dismissal on appeal). Petitioners styled their complaint as a class action, but never included class allegations or moved to certify a class. In their RICO Case Statement that the district court ordered them to file, petitioners counsel described his personal crusade to overhaul Michigan s workers-compensation system, identifying himself as a Michigan workers compensation specialist representing injured workers [who] detests the widespread use by workers compensation claims adjusters of dishonest IME doctors to cut off benefits. R.8 Amended RICO case statement, pg. 14 (emphasis added). The petition fails to mention that this action is one of several similar cases counsel has brought, using the same theory but against differing arrays of employer, claims administrator/insurer, and IME physician. In each such case where defendants have moved for dismissal, it has been granted. Respondents each filed motions to dismiss under Fed. R. Civ. P. 12(b)(1) and/or 12(b)(6). After full briefing, the district court issued a lengthy opinion rejecting all of petitioners arguments and dismissing their case. Pet. App. 96a, 94a. Jackson s administrative claim for benefits under Michigan s WDCA was pending when the district court dismissed this action. Pet. App. 10a, 94a. Before the

10 3 WDCA magistrate could rule on his claim, he settled and redeemed his claim. Pet. App. 10a. Had Jackson gone to trial in his workers-compensation claim and been dissatisfied with the result, he had a statutory appeal process available that could have culminated in review by the Michigan Court of Appeals and, ultimately, the Michigan Supreme Court. Pet. App. 5a- 7a. Also, Michigan s administrative workerscompensation claim system provides claimants with many procedural safeguards, and numerous mechanisms for establishing that an employer denied his claim through fraud. Pet. App. 8a-9a. Petitioners appealed the district court s dismissal. While the case was fully briefed and awaiting argument, briefing in the Sixth Circuit commenced in January 2011 in another of their counsel s RICO cases, Brown v. Cassens Transport, Inc. ( Brown II ). Brown II ultimately was argued telephonically to the Sixth Circuit two weeks before this case in July 2011, and the Brown II panel ruled first, a 2-1 decision reversing the district court and reinstating the case. Brown v. Cassens Transport, Inc., 675 F.3d 946 (6th Cir. 2012). The Brown II defendants sought certiorari, but after calling for a response from plaintiffs, this Court denied the petition. Cassens Transport, Inc. v. Brown, 133 S. Ct (2013). In November 2012 the Sixth Circuit issued its panel decision in this case, reversing the district court. Pet. App. 59a. Judge Moore, author of Brown II, also wrote the panel opinion in this case. Chief Judge Batchelder and Judge Guy concurred, but only because Brown II compelled that result. Pet. App. 87a. Respondents sought and obtained rehearing en banc, and the court

11 4 in September 2013 issued its en banc opinion, overruling Brown II and affirming the district court s dismissal of this action. Pet. App. 1a. REASONS FOR DENYING THE WRIT The en banc Sixth Circuit correctly analyzed RICO s text and this Court s precedents in determining that petitioners failed to plead injury to their business or property. Moreover, the circuit split petitioners present is illusory: the Ninth Circuit authority to which they point is factually inapplicable, and has been disregarded by subsequent courts. Additionally, this matter presents a poor vehicle for addressing the question petitioners seek to raise: one of them never was examined by Dr. Drouillard, and the other petitioner settled and redeemed his underlying workers-compensation claim before any determination as to his entitlement to benefits. Even if the Sixth Circuit had erred, several alternate bases exist for affirming dismissal of the complaint. I. The ruling below was correct, and does not create a circuit split. The Sixth Circuit correctly determined that petitioners claims do not plead injury to business or property. Moreover, there is no actual conflict with any other circuit that warrants this Court s intervention. 1. As the Sixth Circuit correctly noted, the circuits have uniformly interpreted the statutory requirement of injury to business or property to exclude personal injuries, including the pecuniary losses therefrom. Pet. App. 16a-17a, citing Grogan v. Platt, 835 F.2d 844,

12 5 847 (11th Cir. 1988), Fleischhauer v. Felter, 879 F.2d 1290, 1300 (6th Cir. 1989), Evans v. City of Chicago, 434 F.3d 916, 932 (7th Cir. 2006), overruled on other grounds, Hill v. Tangherlini, 724 F.3d 965, 967 n.1 (7th Cir. 2013); Hughes v. Tobacco Inst., Inc., 278 F.3d 417, 422 (5th Cir. 2001), Hamm v. Rhone-Poulenc Rorer Pharms., Inc., 187 F.3d 941, 954 (8th Cir. 1999), Bast v. Cohen, Dunn & Sinclair, PC, 59 F.3d 492, 495 (4th Cir. 1995), Doe v. Roe, 958 F.2d 763, (7th Cir. 1992), and Drake v. B.F. Goodrich Co., 782 F.2d 638, 644 (6th Cir. 1986); Diaz v. Gates, 420 F.3d 897, 900 (9th Cir. 2005) (en banc). The principle arises from this Court s observation that Congress, in enacting the same limitation in 4 of the Sherman Act, must have intended to exclude some class of injuries. Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979) The Sixth Circuit s en banc decision here stands firmly in the middle of that well-traveled path. 2. Petitioners in essence are complaining merely of a misapplication of a properly stated rule of law, i.e. Reiter. Under Rule 10, that is an insufficient basis for certiorari. 3. The cases on which petitioners rely create no circuit split. In Living Designs, Inc. v. E.I. du Pont de Nemours & Co., 431 F.3d 353 (9th Cir. 2005), Pet. at 7, the Ninth Circuit held that plaintiffs properly pleaded injury to business or property as a result of being fraudulently induced into settling claims for lesser amounts than they would have received. But that was because the underlying claims were not ones for personal injury; rather, they were product-liability claims brought by nurserymen over an allegedly defective fungicide. Thus, where allegedly fraudulent

13 6 conduct caused them to settle those claims for less than they otherwise would have, the resulting harm was a proprietary type of damage that met RICO s standing requirement. Pet App. at 19a, citing Bankers Trust Co. v. Rhoades, 741 F.2d 511, 515 (2d Cir. 1984), vacated on other grounds, 473 U.S. 922 (1985). There is no split created where one case recognizes as injury to business or property a reduction in damages one may collect for fraud-induced harm to one s commercial business, and this one, holding that an alleged reduction in the amount a claimant obtains for a workrelated back or shoulder injury is a non-redressable personal injury. Pet. App. 18a-19a. An award of workers-compensation benefits, and any dispute over them in stark contrast to a proprietary type of damage is inextricably intertwined with a personal injury giving rise to the benefits. Pet. App. 20a. Diaz, on which petitioners also rely, Pet. at 8, likewise presents no basis for certiorari. The plaintiff in Diaz sought recovery for lost employment and employment opportunities incurred while he was wrongly imprisoned by an alleged conspiracy of 200 defendants, mostly Los Angeles police officers, to fabricate evidence against him. Sitting en banc, the divided Ninth Circuit partitioned Diaz s alleged harms among two categories (1) the personal injury of false imprisonment and (2) the property injury of interference with current or prospective contractual relations and found that the latter constituted injury to business or property sufficient to confer RICO standing. 420 F.3d at 902. That approach has no application here, however, where petitioners claimed property interest is inextricably intertwined with their personal injuries. Pet. App. 20a. Further, as

14 7 subsequent courts have noted, Diaz s dichotomy is equal parts mischaracterization of the RICO statute and red herring, because it wrongly conflates the issues of whether the alleged injury constitutes injury to business or property, and whether such injury was proximately caused by a predicate RICO act. Evans, 434 F.3d at 931 & n.26. Diaz s false imprisonment was not a personal injury, it was a cause of action arising in tort that gave rise to personal injury, i.e. loss of employment, loss of consortium, etc. Id. (emphasis added). Thus, his employment loss and ensuing monetary losses merely represent pecuniary losses derivative of an underlying, non-compensable personal injury, and did not confer RICO standing. Id., citing Reiter, 442 U.S. at 339, and Doe, 958 F.2d at 770. So it is here: any award of benefits due petitioners under Michigan s workers-compensation system, as well as any dispute over them, is inextricably intertwined with a personal injury giving rise to the benefits. Pet. App. 20a Finally, even if the foregoing were incorrect and a true circuit split existed, it still does not warrant this Court s review. Diaz and Living Designs are nearly a decade old; in that time the flow of litigation under 1 Diaz appears to be an outlier in RICO jurisprudence, as several other courts (in addition to Evans) have expressly rejected it. Bougopoulos v. Altria Group, Inc., 954 F. Supp. 2d 54 (D.N.H. 2013) (lost income from inability to work due to lung disease did not constitute injury to business or property sufficient to support RICO claim against tobacco company); see also Jackson v. NAACP, No , 2013 U.S. App. LEXIS 20493, **14-15 (5th Cir. Oct. 8, 2013) (Diaz predates Anza v. Ideal Steel Supply Corp., 547 U.S. 451 (2006) and thus does not apply correct RICO proximate-cause standard).

15 8 RICO has not abated quite the opposite. And, if there is any problem with lower courts misinterpreting RICO s standing requirement, it appears limited to the Ninth Circuit. Even assuming correction is needed, the Court should wait to see if the Ninth Circuit selfcorrects exactly as the Sixth Circuit did here in overruling Brown II. II. Due to its factual peculiarities and alternate bases for affirming dismissal, this case presents a poor vehicle with which to determine whether fraudulent benefit denials constitute injury to business or property. 1. As the Sixth Circuit noted, the district court put forth several reasons for dismissing the case, and it needed only to find one meritorious in order to affirm. Pet. App. 12a, citing Brown II, 675 F.3d at 969 (Gibbons, J., dissenting); see also Pet. App. 133a-148a; 159a-162a; 172a-178a. On those other issues, the district court indicated strongly that dismissal would be warranted, but declined to reach them because closely related issues more clearly justified dismissal. Pet. App. 152a-159a; Pet. App 163a-171a. Any one of them would be a basis for affirming dismissal, even if this Court were to grant certiorari and reverse on the issue of what constitutes business or property. Because of that, any decision this Court might reach on the issue of RICO standing would be robbed of any practical significance. And specifically with regard to Dr. Drouillard, whose role was to examine one of the petitioners here and render a medical opinion, witness immunity provides an additional basis for dismissal. Briscoe v.

16 9 LaHue, 460 U.S. 325, 345 (1983). As this Court has recognized, controversies sufficiently intense to erupt in litigation are not easily capped by a judicial decree, and [t]he loser in one forum will frequently seek another, charging the participants in the first with unconstitutional animus that is the very principle that gave rise to common-law immunities. Butz v. Economou, 438 U.S. 478, 512 (1978); see also Mitchell v. Forsyth, 472 U.S. 511, (1985) ( [i]t is inevitable that many of those who lose will pin the blame on judges, prosecutors or witnesses, and will bring suit against them in an effort to relitigate the underlying conflict ). Petitioners simply seek to use RICO and its potent treble-damage provision as a club against Dr. Drouillard, in lieu of the mechanism Michigan s Legislature established for rectifying harm of the type they allege: cross-examination. Dr. Drouillard consistently and repeatedly argued this below. Yet while the Sixth Circuit dismissed the case, it did so on other grounds. A grant of certiorari, even if only to affirm the Sixth Circuit s correct interpretation of 1962(c), will simply subject Dr. Drouillard to further litigation that, by petitioners own account, is designed to cripple him professionally. An uncertain immunity is little better than no immunity at all, Filarsky v. Delia, 132 S. Ct. 1657, 1666 (2012). Certiorari should be denied. 2. With regard to Dr. Drouillard, any dispute also would appear to be moot: one of the petitioners settled his workers-compensation claim prior to any judicial determination of entitlement to benefits, and the other never was examined by the doctor.

17 10 CONCLUSION The petition for a writ of certiorari should be denied. Respectfully submitted, Michael F. Smith Counsel of Record The Smith Appellate Law Firm 1747 Pennsylvania Ave. NW Suite 1025 Washington, D.C (202) smith@smithpllc.com Daniel B. Tukel Butzel Long PC 150 W. Jefferson Ave. Suite 100 Detroit, MI (313) Counsel for Respondent Dr. Paul Drouillard