If you've been denied group disability benefits by Unum, your options as an individual used to be limited to either a civil suit under your state's insurance regulations or a federal action under the Employee Retirement Income Security Act of 1974 (ERISA). Companies like Unum have relatively little to fear from ERISA actions, because ERISA limits plaintiffs' rights to a jury trial and compensatory or punitive damages.
Attorney Raymond Bourhis observes, "Someone can wind up on welfare, lose their home, and they can't be compensated beyond the benefits they were entitled to. If you do make a claim, and the insurance company says we won't pay you, your sole remedy is to file suit in federal court for past benefits." That doesn't make an attractive case for lawyers, either; the limited damages available under ERISA for individual cases simply don't make it worth their time and effort.
RICO, by contrast, allows a plaintiff to collect triple damages as well as punitive damages and prejudgement interest. Small wonder, then, that a number of attorneys handling cases again Unum had been trying to include RICO violation charges, and that Unum had just as vigorously sought to fend them off.
Things finally came to a head in the case of Weiss v. First Unum, a classic example of Unum denying disability benefits, in this instance to investment banker Richard Weiss. Weiss was covered by a group disability plan when he suffered a heart attack in 2001 from which he never fully recovered. After Weiss was forced to leave his job, Unum quickly terminated his disability benefits, claiming that he was no longer disabled, despite two angioplasties and implantation of a pacemaker that still left him with a weakened heart, low blood pressure, and chronic fatigue.
Weiss initially sued in state court, charging consumer fraud, bad-faith termination, and intentional infliction of emotional distress. After Unum had the case moved to federal court under ERISA, Weiss's attorney added state and federal RICO charges, alleging that Unum committed mail and wire fraud in letters and calls to Weiss.
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Attorney Michael Hiller of New York cautions that Weiss' success doesn't necessarily open the floodgates for RICO violation charges: "It's a very serious allegation. RICO is not just another fraud statute. You can't just jump right in. If you don't know what you're doing, you're going to see the case dismissed."
That said, Hiller's firm recently won an immediate and large settlement from Unum in a disability benefits case when they included RICO violations in their complaint. He says, "Based on my experience, there are definitely insurance companies out there whose conduct falls under the RICO statute."