Larson’s Spotlight on Recent Cases: Guilty Plea Sentence Affirmed for Workers’ Comp Fraud

Larson’s Spotlight on Recent Cases: Guilty Plea Sentence Affirmed for Workers’ Comp Fraud

Larson's Spotlight on Fraud, Post Traumatic Stress Disorder, Employer Status for Religious Colony, and Negligent Provision of Firearm. Larson's surveys the latest case developments that you need to know about. Thomas A. Robinson, the staff writer for Larson's Workers' Compensation Law, has compiled the list below.

US: 8th Circuit Affirms Guilty Plea Sentence Related to Fraudulent Reduction of Workers' Compensation Premiums

The Eighth Circuit Court of Appeals recently affirmed a criminal sentence on a defendant's guilty plea to wire fraud in connection with his scheme to reduce his company's workers' compensation premiums. The defendant had challenged the district court's "sophisticated means" and "leadership-role" enhancements under U.S. Sentencing Guidelines Manual §§ 2B1.1(b)(10)(C), 3B1.1(a), as well as the court's failure to vary downward, and its restitution award.  Defendant admitted he had shifted payroll to less expensive job classifications over several years, and that he had also created shell corporations with unwitting or uninvolved individuals as ostensible "owners." He went to great lengths to manipulate the premium calculation factors. The circuit court indicated that the sophisticated-means enhancement concerned the "how" of an offense, while the leadership-role enhancement, which had to consider all persons involved during the course of the entire offense in determining if an organization was "otherwise extensive," was concerned with the "how far" and "who." The Eighth Circuit said that applying both enhancements was not double counting, as each was uniquely supported by the facts. Nor was there was any error in the district court's restitution award.

See United States v. Sethi, 2013 U.S. App. LEXIS 435 (8th Cir., Jan. 8, 2012).

See generally Larson's Workers' Compensation Law, § 63.01.

OH: State's Restrictive Definition of Injury Requires Physical Injury to be a Cause, Although Not the Sole Cause of Worker's PTSD

Construing Ohio's relatively restrictive definition of "injury" [Ohio Rev. Code § 4123.01] that states, in relevant part, that psychiatric conditions, including posttraumatic stress disorder ("PTSD"), are compensable only when the condition arises from a physical injury or occupational disease sustained by the claimant, an Ohio appellate court recently affirmed a trial court's summary judgment in favor of a medical center clerk who was awarded benefits for her PTSD condition that arose after the medical clerk and four others were taken hostage by an inmate who escaped from guards as he was being treated at the medical center.  During the standoff, the inmate grabbed the clerk's wrists and banged one of them against a doorway, causing a minor physical injury.  He also told the hostages that if they did not do as he said, he would kill them. The medical clerk produced expert medical evidence suggesting her physical injury was "a cause," but not the "sole cause" of the PTSD.  The employer contended this was an insufficient showing.  The appellate court disagreed.  There was no statutory basis for saying that the physical injury need be the sole cause of the PTSD.

See Jones v. Catholic Healthcare Partners, Inc., 2012 Ohio 6269, 2012 Ohio App. LEXIS 5441 (Dec. 31, 2012).

See generally Larson's Workers' Compensation Law, § 56.03.

MT: Hutterite Society Is Employer for Workers' Comp Purposes, No Abridgement of Its Constitutional Rights

The Supreme Court of Montana, in a split decision, recently reversed a trial court's summary judgment decision that had held that a Colony within the Hutterite Brethren Church could not be cast as an "employer," and its members as "employees," for purposes of workers' compensation law.  The majority of the state high court disagreed, holding that a 2009 amendment to the workers' compensation law [HB 119, 2009 Mont. Laws. ch. 112 § 30] regulated the Colony's engagement in commercial activities in the same manner that the workers' compensation system regulated the commercial activities of other employers in Montana and, accordingly, the law did not violate the Colony's rights under the Free Exercise Clause and the Establishment Clause of the First Amendment to the U.S. Constitution, nor did it violate the Colony's right to equal protection under the laws of the U.S. Constitution and the Montana Constitution.

See Big Sky Colony, Inc. v. Montana Dep't of Labor and Industry, 2012 MT 320 (Dec. 31, 2012).

See generally Larson's Workers' Compensation Law, § 65.01.

US: Civil Action Against Employer for Negligent Provision of Firearm to Security Guard Fails

The personal representative of a security guard who fatally shot himself with a handgun that had been provided to him by his employer may not maintain a wrongful death action against that securities firm, held the Court of Appeals for the D.C. Circuit recently. Affirming the district court, the circuit court rejected the employer's argument that the wrongful death action was barred by the exclusive remedy provisions of the D.C. Workers' Compensation Act ("the Act), agreeing with the plaintiff that the Act did not apply "where injury to the employee was occasioned solely by his intoxication or by his willful intention to injure or kill himself or another." The court noted, however, that by relying on D.C. Code § 32-1503(d) to escape the Act's coverage, plaintiff "effectively admitted that the suicide was a willful and intentional act." If the death was the result of the deceased's intentional act, it could hardly have been the result of the employer's negligence, reasoned both the district and the circuit court.  The deceased's act was an intervening event that precluded liability on the part of the employer.

See Rollins v. Wackenhut Servs., Inc., 2012 U.S. App. LEXIS 26549 (D.C. Cir., Dec. 28, 2012).

See generally Larson's Workers' Compensation Law, § 38.01.

Source: Larson's Workers' Compensation Law, the nation's leading authority on workers' compensation law.

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