Oct 19, 2017

RICO & ERISA


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11/17/2008
Brian S. King
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No, this post is not about a teenage romance. Rather, it touches on the relationship between two intricate and far reaching federal statutes. Any blog entry about how these two statutes work together will necessarily hit only the highest points. One interesting angle that has recently cropped up is illustrated by the U.S. Court of Appeals for the Third Circuit decision last month in Weiss v. First UNUM, 482 F.3d 254 (3rd Cir. 2007). Roy Harmon at Health Plan Law dissects that decision in his excellent post here. My comments are directed more to the ability of claimants to bring claims under both statutes in the same lawsuit against related or, perhaps, the same defendants. The Racketeering Influenced and Corrupt Organizations Act (RICO) was passed in 1970 with the intent of being used as a tool to shut down organized crime. It was phrased broadly to cast a wide net over a variety of activities such as wire fraud, mail fraud, extortion and a number of other activities that were often associated with the mafia. In order to get within the scope of RICO, there has to exist a predicate act, one or more of a series of crimes that are enumerated in the statute, that occurs with some repetition. The statute calls for treble damages when it is violated. The provision of RICO that ties it to ERISA is 18 U.S.C. §1954. That section of RICO makes clear that one of its predicate acts is where there are broadly defined actions that constitute an attempt to improperly influence the operations of employee pension and welfare benefits plans. It is not surprising RICO includes this language. After all, one of Congress’s primary concerns in drafting ERISA was to provide greater protection against criminal acts gutting pension plans. The final piece to the puzzle is 29 U.S.C. §1144(d) which states that ERISA does not preempt application of any other federal law. So it’s quite clear that the statutes can co-exist and, when facts exist to justify the claims being brought together, can pack quite a punch to help claimants and give defendants some concern.

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