New Jersey Follow up: The Broad, Blind Brush of Justice

March 30th, 2007 by

We recently blogged the racketeering conviction of 80 former factory workers in New Jersey. A Federal judge has fined the workers $2.26 million for the filing of fraudulant comp claims. Now the state is examining the ramifications of the judgment, which exposes an enormous fault line between state and federal law.
Here’s the problem. The racketeering conviction paints all the workers with one broad brush. The federal court, seeing a disturbing pattern in the 80 identical claims that were filed, has determined that all the claims are fraudulant. That means that any claims accepted by the state workers comp system immediately become a liability under the federal judgment. The value of the claim is tripled and added to the default judgment. For example, if the state system awards a worker $300 per week indemnity and covers medical bills for treatment, that same worker owes $900 per week indemnity plus triple the cost of the medical treatment under the federal case. Ironically, the workers are (financially) better off if their claims are denied. A Catch-22 if there ever was one.
Tne New Jersey labor commissioner has asked the Attorney General’s office to look into the situation. The AG should brush up on the Federalist papers. Unless the state convinces the feds to back off from their blanket judgment, the workers will remain in a grotesque limbo. Those with legitimate injuries will not only lose access to the comp benefits they are entitled to, they are still liable for a judgment that exceeds their annual incomes.
There is little question that the mass filing of identical claims involved fraud. The law firm involved has already settled. The guys in suits just walk away, as usual, leaving the burden on the backs of the workers – mostly hispanic women, many of whom do not speak English. Sure, they signed the false papers, but did they have any idea what they were signing? They have to accept some form of responsibility. But it is a painful irony that the handful of workers with legitimate, work-related claims are the ones most at risk.
A Smaller Brush?
It is probably far fetched to assume a solution such as this: any worker who thinks he or she has a real injury undergoes an independent medical exam. If the exam finds a work-related condition, the case is separated out from the federal judgment. The worker collects comp benefits. If there are no objective findings, or if the former employee decides not to file a claim, the worker is stuck with the (unpayable) fine. It’s not perfect, but it would be a lot fairer than the current nightmare, which tars all of these workers with the same very broad and very ugly brush.