RECOMMENDED FOR FULL-TEXT PUBLICATION
                                     Pursuant to Sixth Circuit Rule 206
                                             File Name: 08a0385p.06

                       UNITED STATES COURT OF APPEALS
                                        FOR THE SIXTH CIRCUIT
                                          _________________


                                                   X
                                                    -
 PAUL BROWN, WILLIAM FANALY, CHARLES
                                                    -
 THOMAS, GARY RIGGS, ROBERT ORLIKOWSKI, and
                                                    -
 SCOTT WAY,
                            Plaintiffs-Appellants, -
                                                       No. 05-2089

                                                    ,
                                                     >
           v.                                       -
                                                    -
 CASSENS TRANSPORT CO., CRAWFORD & COMPANY, -
                                                    -
                          Defendants-Appellees. -
 and DR. SAUL MARGULES,
                                                    -
                                                    -
                                                    -
                                                   N
                   On Remand from the United States Supreme Court
                    No. 04-72316—Paul D. Borman, District Judge.
                                           Argued: July 27, 2006
                                  Decided and Filed: October 23, 2008
         Before: MOORE and GIBBONS, Circuit Judges; ACKERMAN, District Judge.*
                                            _________________
                                                  COUNSEL
ARGUED: Marshall D. Lasser, LAW OFFICE OF MARSHALL LASSER, Southfield, Michigan,
for Appellants. Janet E. Lanyon, DEAN & FULKERSON, Troy, Michigan, Joan N. Pierson, THE
WILLIAMS FIRM, Grand Blanc, Michigan, for Appellees. ON BRIEF: Marshall D. Lasser, LAW
OFFICE OF MARSHALL LASSER, Southfield, Michigan, for Appellants. Janet E. Lanyon, DEAN
& FULKERSON, Troy, Michigan, Timothy R. Winship, THE WILLIAMS FIRM, Grand Blanc,
Michigan, for Appellees.
                                            _________________
                                                OPINION
                                            _________________
       KAREN NELSON MOORE, Circuit Judge. This case involves the dismissal of the claims
of Plaintiffs-Appellants Paul Brown, William Fanaly, Charles Thomas, Gary Riggs, Robert
Orlikowski, and Scott Way (collectively referred to as “plaintiffs”) against Defendants-Appellees

        *
          The Honorable Harold A. Ackerman, United States District Judge for the District of New Jersey, sitting by
designation.


                                                        1
No. 05-2089                Brown et al. v. Cassens Transport Co. et al.                                             Page 2


Cassens Transport Company (“Cassens”), Crawford & Company (“Crawford”), and Dr. Saul
Margules (collectively referred to as “defendants”) under Federal Rule of Civil Procedure 12(b)(6).
The plaintiffs alleged that the defendants employed mail and wire fraud in a scheme to deny them
worker’s compensation benefits under the Michigan Worker’s Disability Compensation Act
(“WDCA”), MICH. COMP. LAWS § 418.301, in violation of the Racketeer Influenced and Corrupt
Organizations Act (“RICO”), 18 U.S.C. §§ 1961(1)(B), 1962(c), 1964(c), and that the defendants’
conduct constituted intentional infliction of emotional distress (“IIED”) under Michigan law. The
plaintiffs appealed the district court’s dismissal of their RICO claims based on the reverse
preemption of the RICO claims under the McCarran-Ferguson Act, 15 U.S.C. § 1012, and for failure
to plead certain claims with particularity, for failure to allege a pattern of racketeering activity, and
for failure to plead reliance on the defendants’ fraud. A divided panel of this court affirmed the
district court’s dismissal of plaintiffs’ RICO claims because plaintiffs had failed to plead detrimental
reliance on alleged misrepresentations of defendants. The Supreme Court vacated our judgment and
remanded for further consideration in light of Bridge v. Phoenix Bond & Indemnity Co., — U.S. —,

(2008), which held unanimously that a civil-RICO plaintiff does not need to show
that it detrimentally relied on the defendant’s alleged misrepresentations.
        On remand, we REVERSE the district court’s dismissal of plaintiffs’ RICO claims because
the WDCA does not preempt their RICO claims and because plaintiffs have sufficiently pleaded a
pattern of racketeering activity given that reliance is not an element of a civil RICO fraud claim.
We REMAND to the district court for further proceedings consistent with this opinion. The
plaintiffs also appeal the district court’s dismissal of their IIED claims for failure to plead
outrageous conduct. We AFFIRM the dismissal of the IIED claims because the alleged conduct
of these defendants could not be deemed outrageous under Michigan law.
                                                I. BACKGROUND
        Plaintiffs are current or former employees of Cassens who have submitted worker’s
compensation claims to Cassens based on workplace injuries they have each sustained. On June 22,
2004, plaintiffs filed a complaint raising RICO and IIED claims against the defendants. Plaintiffs
alleged that Cassens, which was self-insured for purposes of paying benefits under the WDCA,
contracted with Crawford to serve as a claims adjuster for the worker’s compensation claims of
Cassens’s employees. They further pleaded that Cassens, Crawford, and Margules, as well as other
“cut-off” doctors, engaged in a pattern of racketeering activity that denied the plaintiffs’ worker’s
compensation claims. Specifically, the plaintiffs alleged that Cassens and Crawford deliberately
selected and paid unqualified doctors, including Margules, to give fraudulent medical opinions that
would support the denial of worker’s compensation benefits, and that defendants ignored other
medical evidence in denying them benefits. The plaintiffs claimed that the defendants made
fraudulent communications amongst themselves and to the plaintiffs by mail and wire in violation
of 18 U.S.C. §§ 1341, 1343, which serve as the predicate acts for their RICO claims.
        The district court granted the defendants’ motion to dismiss pursuant to Rule 12(b)(6) on
July 15, 2005. Brown v. Cassens        Transp. Co., 

(E.D. Mich. 2005). The
plaintiffs filed this timely appeal.1 A majority of this panel affirmed the dismissal on the ground that
plaintiffs failed to plead that they relied on misrepresentations by defendants. Brown v. Cassens
Transp. Co., 

, 643, 646 (6th Cir. 2007). The U.S. Supreme Court granted plaintiffs’
petition for a writ of certiorari, vacated our judgment, and remanded the case to us for
reconsideration in light of Bridge. Brown v. Cassens Transp. Co., — U.S. —, 

(2008).


         1
           The plaintiffs filed a motion for leave to file an amended complaint, but they did not appeal the district court’s
denial of this motion in their Notice of Appeal. Therefore, that decision is not before us. FED. R. APP. P. 3(a)(1).
No. 05-2089              Brown et al. v. Cassens Transport Co. et al.                                        Page 3


                                       II. STANDARD OF REVIEW
        We review de novo a district court’s determination dismissing a suit for failure to state a
claim upon which relief can be granted pursuant to Rule 12(b)(6). Hill v. Blue Cross & Blue Shield,

, 716 (6th Cir. 2005). The plaintiffs’ factual allegations are taken as true and the
complaint is viewed in the light most favorable to the plaintiffs. 

not affirm the district
court’s dismissal of a complaint on Rule 12(b)(6) grounds “unless it appears beyond doubt that the
plaintiff[s] can prove no set of facts in support of [their] claim[s] which would entitle [them] to
relief.” 

original) (internal quotation marks omitted).
   III. DISMISSAL OF THE CLAIMS OF THOMAS AND RIGGS FOR FAILURE TO
                            STATE A PATTERN
A. General Contours of the RICO Pattern Element and the District Court’s Approach
         RICO makes it a crime “for any person employed by or associated with any enterprise
engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or
participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of
racketeering activity or collection of unlawful debt.” 18 U.S.C. § 1962(c). RICO defines
“racketeering activity” to include “any act which is indictable under any of the following provisions
of title 18, United States Code: . . . section 1341 [18 U.S.C. § 1341] (relating to mail fraud), section
1343 [18 U.S.C. § 1343] (relating to wire fraud).” 

  Plaintiffs claim that defendants
engaged in the racketeering activities of mail and wire fraud.2
        RICO states that a “‘pattern of racketeering activity’ requires at least two acts of racketeering
activity, one of which occurred after [October 15, 1970] and the last of which occurred within ten
years (excluding any period of imprisonment) after the commission of a prior act of racketeering
activity.” 18 U.S.C. § 1961(5). On this basis, the district court assumed that alleging two acts of
racketeering activity was sufficient to state a pattern, and dismissed the claims of Riggs and Thomas
because they sufficiently pleaded only one act each of racketeering activity. The plaintiffs appeal
this conclusion, claiming that the district court was instead required “to look at the pattern of
defendants’ alleged scheme against the group” rather than “the number of predicate acts allegedly
committed against each victim.” Appellants Br. at 25-26.
B. The District Court Erred by Focusing on the Number of Predicate Acts Alleged by Each
   Plaintiff

        RICO’s provision authorizing civil suits, 18 U.S.C. § 1964(c), sheds light on the issue of
predicate acts. Section 1964(c) states that “[a]ny person injured in his business or property by
reason of a violation of [18 U.S.C. § 1962]” may bring a RICO suit. RICO specifies only that the
defendant must have engaged in a “pattern of racketeering activity” to violate 18 U.S.C. § 1962.
As long as the defendant engaged in a pattern of racketeering activity, and the plaintiff was injured
by this pattern of activity, this suffices to state a claim under 18 U.S.C. § 1964(c); nowhere does the
statute require that the injury to each plaintiff must have independently consisted of a pattern of
activity by the defendant. See H.J. Inc. v. Nw. Bell Tel. Co., 

, 250 (1989) (looking only
to the activities of defendants and not the number of predicate acts against each plaintiff in assessing
whether a pattern of racketeering was sufficiently pleaded); Vild v. Visconsi, 

, 567 (6th
Cir. 1992) (“We do not hold that a civil RICO plaintiff must necessarily be directly harmed by all


         2
          Plaintiffs also pleaded that defendants engaged in witness tampering in violation of 18 U.S.C. § 1512, which
also constitutes a predicate act of racketeering under RICO, see 18 U.S.C. § 1961(1)(B). The district court dismissed
the witness-tampering claims, and plaintiffs do not press these claims on appeal.
No. 05-2089                Brown et al. v. Cassens Transport Co. et al.                                             Page 4


the alleged predicate acts, because harm from one enumerated violation may, in certain situations,
be sufficiently connected.”). Therefore, the district court erred in assessing the pattern requirement
by counting the number of predicate acts alleged by each plaintiff. Rather, the district court should
have considered whether the plaintiffs sufficiently pleaded that the defendants were engaged in a
“pattern of racketeering activity,” and, if so, whether they also sufficiently pleaded that each plaintiff
was injured by this pattern of activity.
         Although the defendants do not appear to take issue with the district court’s holding that two
predicate acts constitute a “pattern of racketeering activity,” and thus that a pattern was specifically
pleaded by Brown, Fanaly, Way, and Orlikowski,3 see Appellees Br. at 16 (requesting that the
district court’s decision on whether a pattern was established be upheld), we must consider whether
the defendants were engaged in a “pattern of racketeering activity” to determine whether the district
court erred in dismissing the claims of Riggs and Thomas for failure to state a pattern.
C. Defining a Pattern of Activity Under RICO: Relationship and Continuity
        The district court’s assumption that two predicate acts constitute a pattern under 18 U.S.C.
§ 1961(5) in finding a pattern with regard to the claims of Brown, Fanaly, Way, and Orlikowski fails
to heed the Supreme Court’s definition of “pattern” set forth in H.J. 

. In H.J.
Inc., the Supreme Court held that “while two [predicate] acts are necessary, they may not be
sufficient.” 

(internal quotation marks omitted). Beyond setting forth the minimum
number of predicate acts required to establish a pattern, § 1961(5) “assumes that there is something
to a RICO pattern beyond simply the number of predicate acts involved.” H.J. 

.
“Congress intended to take a flexible approach” to satisfying whatever is required beyond the
minimum number of predicate acts, “and envisaged that a pattern might be demonstrated by
reference to a range of different ordering principles or relationships between predicates, within the
expansive bounds set.” 

numerous sorts of relationships that can constitute a pattern,
two elements must be shown: “that the racketeering predicates are related, and that they amount
to or pose a threat of continued criminal activity.” 

(first and third emphases added).
        A relationship among predicate acts is established when they “have the same or similar
purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by
distinguishing characteristics and are not isolated events.” 

(internal quotation marks
omitted). The “use of the disjunctive suggests that the Court meant to craft a broad test of
relatedness.” United States v. Blandford, 

, 703 (6th Cir. 1994).
        “‘Continuity’ is both a closed- and open-ended concept, referring either to a closed period
of repeated conduct, or to past conduct that by its nature projects into the future with a threat of
repetition.” H.J. 

. Continuity may be demonstrated in a number of ways.
Closed-ended continuity can be shown “by proving a series of related predicates extending over a
substantial period of time.” 

Determining whether open-ended continuity has been


         3
            The district court’s treatment of Orlikowski’s claim is confused. The district court noted that Orlikowski “fails
to specify the means of the communication” with regard to one of the two predicate acts he alleges, Brown, 

at 806 (commenting on the allegation in paragraph fifty-seven), and thus does not satisfy the requirement under
Federal Rule of Civil Procedure 9(b) that a plaintiff allege, at a minimum, “the time, place and contents of the
misrepresentation(s),” Bender v. Southland Corp., 

, 1216 (6th Cir. 1984). However, the district court
simply dismissed the claims of Thomas and Riggs for failure to plead a “‘pattern of racketeering activity’” on the ground
that each alleged only one predicate act of fraud directed at him. Brown, 

at 806. Given the district
court’s apparent conclusion that only one of Orlikowski’s two alleged predicate acts was sufficiently pleaded, it is not
clear why the district court dismissed solely the claims of Thomas and Riggs for failure to plead a pattern. Ultimately,
the district court’s view of Orlikowski’s claims is immaterial because, as we later make clear, Orlikowski has sufficiently
pleaded a RICO pattern on the basis of the alleged conduct of the defendants, regardless of the precise number of acts
he alleges relate specifically to him.
No. 05-2089           Brown et al. v. Cassens Transport Co. et al.                               Page 5


established requires a court to probe “the specific facts of each case.” 

pattern may
surely be established if the related predicates themselves involve a distinct threat of long-term
racketeering activity, either implicit or explicit.” 

“the number of related predicates
involved may be small and they may occur close together in time,” if “the racketeering acts
themselves include a specific threat of repetition extending indefinitely into the future,” this
“suppl[ies] the requisite threat of continuity.” 

of continuity may [also] be established
by showing that the predicate acts or offenses are part of an ongoing entity’s regular way of doing
business.” 

threat of continuity is sufficiently established where the predicates
can be attributed to a defendant operating as part of a long-term association that exists for criminal
purposes.” 

In addition, “[t]he continuity requirement is likewise satisfied where it
is shown that the predicates are a regular way of conducting defendant’s ongoing legitimate business
(in the sense that it is not a business that exists for criminal purposes), or of conducting or
participating in an ongoing and legitimate RICO ‘enterprise.’” 

(footnote omitted).
D. The Plaintiffs Have Pleaded a Pattern
        The plaintiffs have pleaded with sufficient particularity at least thirteen predicate acts, which
are comprised of allegedly fraudulent communications by mail and wire, including communications
among the defendants and communications from the defendants to the plaintiffs relating to each of
the plaintiffs’ injuries and claims for benefits under the WCDA. Therefore, plaintiffs have met the
minimum two-predicate-acts requirement. See 18 U.S.C. § 1961(5); H.J. 

. The
question remains as to whether the plaintiffs have satisfied H.J. Inc.’s relationship-plus-continuity
standard. We conclude that they have.
        First, the predicate acts alleged by the plaintiffs are related. They have the same purpose:
to reduce Cassens’s payment obligations towards worker’s compensation benefits by fraudulently
denying worker’s compensation benefits to which the employees are lawfully entitled. They have
the same result: to deny worker’s compensation benefits to certain Cassens’s employees who are
entitled to such benefits under Michigan law. They have the same participants: alleged in the
complaint are worker’s compensation officials at Cassens and Crawford, including Tina Litwiller,
a claim adjuster for Crawford, and Margules, a doctor who the plaintiffs allege, with regard to some
of the predicate acts, fraudulently recommended ineligibility of benefits at the request of Cassens
and Crawford. They have the same victims: alleged in the complaint are certain Cassens employees
who are eligible for worker’s compensation benefits. They have similar methods of commission:
fraudulent misapplication of the legal standards set forth in the WDCA in denying worker’s
compensation benefits to Cassens’s employees by Titwiller, other officials working for defendants,
or Margules.
        Second, the predicate acts are continuous under either a closed- or open-ended theory.
“[P]laintiff[s] may prove [closed] continuity by showing a series of past related predicates occurring
over an extended period of time,” generally more than “[a] few months.” 

; see
also H.J. 

(noting that “[p]redicate acts extending over a few weeks or months
and threatening no future criminal conduct do not satisfy [the continuity] requirement”). The
plaintiffs have alleged a series of related predicate acts that span well over three years. This
constitutes a period of closed-ended continuity.
        As for open-ended continuity, the Supreme Court has explained that an open period of
continuity is stated when “the predicates are a regular way of conducting defendant’s ongoing
legitimate business.” H.J. 

. The plaintiffs allege precisely that. Specifically,
the plaintiffs allege that the legitimate business or part of the legitimate business of each of the
defendants—addressing its employees worker’s compensation claims for Cassens, worker’s
compensation claim administration on behalf of Cassens for Crawford, and offering his medical
opinion on worker’s compensation claims for Margules—is regularly conducted by fraudulently
No. 05-2089                Brown et al. v. Cassens Transport Co. et al.                                              Page 6


denying benefits to which the employees are entitled through the use of fraudulent communications
by mail and wire. Although the plaintiffs do not specifically allege that this conduct is ongoing,
given that “the threat of continuity need not be established solely by reference to the predicate acts
alone,” and that “facts external to the predicate acts may, and indeed should, be considered,” United
States v. Busacca, 

, 238 (6th Cir. 1991) (explaining that “the totality of the
circumstances surrounding the commission of the predicate acts are considered to determine whether
those acts pose a threat of continuing criminal activity”), the plaintiffs’ allegations also state a period
of open continuity.
        Each of the plaintiffs has also sufficiently pleaded that they were injured by the defendants’
“pattern of racketeering activity” under 18 U.S.C. § 1964(c) because the defendants’ fraud deprived
the plaintiffs of4 worker’s compensation benefits and caused them to incur attorney fees and medical
care expenses.
         IV. RELIANCE AS AN ELEMENT OF FRAUD IN A CIVIL RICO CLAIM
A. Reliance Is Not Required for a Civil RICO Fraud Claim
        The Supreme Court recently held “that a plaintiff asserting a RICO claim predicated on mail
fraud need not show, either as an element of its claim or as a prerequisite to establishing proximate
causation, that it relied on the defendant’s alleged misrepresentations.” Bridge v. Phoenix Bond &
Indem. Co., — U.S. —, 

, 2145 (2008). Resolving a circuit split, the Court
unanimously determined that “first-party reliance is [not] an element of a civil RICO claim
predicated on mail fraud.” 

The Court found that neither the statute nor common-law
rules or policy arguments provided a basis for imposing a first-party reliance requirement. 

See also Chaz Concrete Co. v. Codell, — F.3d —, 

, at *2 (6th Cir. Oct. 21,
2008).



         4
            Federal Rule of Civil Procedure 9(b)’s requirement that “[i]n alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud or mistake” has been applied to allegations of fraud made in support
of a RICO claim. See, e.g., Blount Fin. Servs., Inc. v. Walter E. Heller & Co., 

, 152-53 (6th Cir. 1987).
Rule 9(b) has been construed to require a plaintiff to allege, at a minimum, “the time, place and contents of the
misrepresentation(s).” 

. On this basis, the district court dismissed the allegations set forth in
paragraphs 12, 16A, 24, 32, 34, and 57 of the complaint for lack of the requisite particularity under Rule 9(b). The
plaintiffs argue that this ruling was in error because, under Federal Rule of Civil Procedure 11(b)(3), these allegations
“will likely have evidentiary support after a reasonable opportunity for further investigation or discovery,” and because
the defendants had exclusive possession of the particular details related to these allegations of fraud.
           The plaintiffs contend that under Rule 11(b)(3) and Rotella v. Wood, 

, 560 (2000), the district court
should have afforded them the opportunity for discovery to flesh out the details of these allegations before dismissing
them. In Rotella, a civil RICO suit alleging fraud, the Supreme Court explained that Rule 11(b)(3) provides “flexibility,
. . . allowing pleadings based on evidence reasonably anticipated after further investigation or discovery.” 

(citing Corley v. Rosewood Care Ctr., Inc. of Peoria, 

, 1050-51 (7th Cir. 1998)). In rejecting
the plaintiffs’ position, the district court stated that “while Rule 11(b)(3) may relax Rule 9(b)’s particularity requirement,
it cannot be construed to eviscerate that requirement in its entirety by permitting rank speculation.” Brown, 

at 805. In light of our holding that the plaintiffs have successfully pleaded a “pattern of racketeering activity” without
considering the dismissed allegations and the liberal amendment standard under Federal Rule of Civil Procedure 15(a),
Tucker v. Union of Needletrades, Indus., & Textile Employees, 

, 788 (6th Cir. 2005), we need not consider
the correctness of the district court’s ruling in dismissing these allegations for lack of particularity. We express no view
as to whether the district court should have permitted the plaintiffs to plead additional particular facts after discovery
under Rule 11(b)(3), other than to note that such a notion is not foreign to this court. See Michaels Building Co. v.
Ameritrust Co., 

, 679-81 (6th Cir. 1988) (holding that plaintiffs alleging RICO civil fraud claims that failed
to satisfy Rule 9(b)’s particularity requirement were entitled to opportunity for discovery under Rule 11(b)(3) before their
claims were dismissed). Should discovery confirm the plaintiffs’ initial beliefs regarding the fraudulent nature of the
dismissed allegations and provide the necessary details to satisfy Rule 9(b), the plaintiffs can then amend the complaint
to replead the dismissed allegations. See FED. R. CIV. P. 15(a); 

.
No. 05-2089                 Brown et al. v. Cassens Transport Co. et al.                                          Page 7


        In addition to rejecting a reliance requirement, the Court in Bridge also reaffirmed its
position in Holmes v. Securities Investor Protection Corp., 

, 268 (1992), that 18 U.S.C.
§ 1964(c) “requires the plaintiff to establish proximate cause in order to show injury ‘by reason of’
a RICO violation.” 

. The Court reiterated that this “‘demand[s] . . . some
direct relation between the injury asserted and the injurious conduct alleged.’” 

(quoting

). Nonetheless, although first-party reliance might be useful in showing
proximate causation, “‘the fact that proof of reliance is often used to prove an element of the
plaintiff’s cause of action, such as the element of causation, does not transform reliance itself into
an element of the cause of action.’” 

(quoting Anza v. Ideal Steel Supply Corp., 

, 478 (2006) (Thomas, J., concurring in part and dissenting in part)).
       After Bridge, plaintiffs need not plead or prove that they relied on defendants’ alleged
misrepresentations in order to establish the elements of their civil RICO claim based on mail or wire
fraud. Dismissal of plaintiffs claims on this basis cannot be sustained.
B. Plaintiffs Have Sufficiently Pleaded that Their Injuries Were “By Reason of” the
   Defendants’ Alleged Fraud
        Plaintiffs have sufficiently pleaded that the defendants’ fraud was directly related to and was
the proximate cause of their injuries as required by 18 U.S.C. § 1964(c) under 

, and 

. Accepting the facts as recited in the complaint, the defendants’
fraudulent acts were a “substantial and foreseeable cause” of the injuries alleged by the plaintiffs:
the deprivation of their worker’s compensation benefits and expenses for attorney fees and medical
care. Trollinger v. Tyson Foods, Inc., 

, 615 (6th Cir. 2004) (explaining, in a RICO
case, that proximate cause is shown when “the wrongful conduct [is] a substantial and foreseeable
cause” of the injury and the relationship between the wrongful conduct and the injury is “logical and
not speculative”). The “direct causal connection” requirement has been met, as no “intricate,
uncertain” inquiries are required to link the defendants’ alleged fraud and the plaintiffs’ injuries.

.
       V. REVERSE PREEMPTION UNDER THE McCARRAN-FERGUSON ACT
        The McCarran-Ferguson Act, 15 U.S.C. § 1012(b), provides: “No Act of Congress shall be
construed to invalidate, impair, or supersede any law enacted by any State for the purpose of
regulating the business of insurance, . . . unless such Act specifically relates to the business of
insurance.” “The McCarran-Ferguson Act thus precludes application of a federal statute in face of
state law ‘enacted . . . for the purpose of regulating the business of insurance,’ if the federal measure
does not ‘specifically relat[e] to the business of insurance,’ and would ‘invalidate, impair, or
supersede’ the State’s law.” Humana, Inc. v. Forsyth, 

, 307 (1999) (alteration in
original) (quoting 15 U.S.C. § 1012(b)). The district court concluded that the WDCA reverse
preempts RICO under the McCarran-Ferguson Act because RICO does not “relate to the business
of insurance,” the WDCA was enacted to regulate the business of insurance, and RICO would impair
the WDCA. Brown, 

at 808-11. The plaintiffs appeal this conclusion, arguing that
WDCA was not enacted to regulate        the business of insurance and that RICO will not “invalidate,
impair, or supersede” the WDCA.5
A. The WDCA Was Not Enacted for the Purpose of Regulating the Business of Insurance
        The Supreme Court has explained that “‘[s]tatutes aimed at protecting or regulating this
relationship [between insurer and insured], directly or indirectly, are laws regulating the business
of insurance,’ within the meaning of the phrase [used by McCarran-Ferguson].” United States Dep’t

        5
            The parties agree that RICO does not “specifically relate[] to the business of insurance.” 15 U.S.C. § 1012(b).
No. 05-2089               Brown et al. v. Cassens Transport Co. et al.                                            Page 8


of Treasury v. Fabe, 

, 501 (1993) (alteration in original) (quoting SEC v. Nat’l Secs.,
Inc., 

, 460 (1969)). The Supreme Court has also emphasized that
         the focus of McCarran-Ferguson is upon the relationship between the insurance
         company and its policyholders: “The relationship between insurer and insured, the
         type of policy which could be issued, its reliability, interpretation, and
         enforcement—these were the core of the ‘business of insurance.’ Undoubtedly, other
         activities of insurance companies relate so closely to their status as reliable insurers
         that they too must be placed in the same class. But whatever the exact scope of the
         statutory term, it is clear where the focus was—it was on the relationship between
         the insurance company and the policyholder.”

).
         In determining whether particular practices constitute “‘the business of insurance’” under
the McCarran-Ferguson Act, three factors are considered: “‘first, whether the practice has the effect
of transferring or spreading a policyholder’s risk; second, whether the practice is an integral part of
the policy relationship between the insurer and the insured; and third, whether the practice is limited
to entities within the insurance industry.’” Ky. Ass’n of Health Plans, Inc. v. Miller,6 

,
339 (2003) (quoting Union Labor Life Ins. Co. v. Pireno, 

, 129 (1982)). No one factor
is determinative. 

.
        In assessing whether a state law addresses “the business of insurance” under the McCarran-
Ferguson Act, the Supreme Court has made clear that the focus is on “how to characterize conduct
undertaken by private actors,” rather than “how to characterize state laws in regard to what they
‘regulate.’” Ky. Ass’n of Health Plans, 

; 

There are two possible
views as to the forms of conduct or practices that the WDCA encompasses that can be considered
in assessing whether the WDCA covers “the business of insurance.” First, the worker’s
compensation benefits mandated by the WDCA can be seen as a form of insurance to provide
compensation for workplace injuries, thus perhaps creating an insurance-like relationship in which
the employer is the “insurer” and the employee is the “insured.” This will be referred to as the
“benefits-as-insurance” theory. Alternatively, the WCDA contains provisions regulating how an
employer can insure itself to provide worker’s compensation coverage that could be seen as part of
“the business of insurance.” This will be referred to as the “insurance-provisions” theory.
         In arriving at the conclusion that the WDCA addresses “the business of insurance,” the
district court appeared to rely on the benefits-as-insurance theory. This understanding of the WDCA
is precarious at best. As stated above, “[t]he focus of McCarran-Ferguson is upon the relationship
between the insurance company and its policyholders.” 

(emphasis added).
Under the benefits-as-insurance theory, there is no relationship between an insurance company and
a policyholder because worker’s compensation benefits are not insurance. Although at first blush
worker’s compensation benefits may seem to act as a form of insurance because they provide
compensation for injuries like many forms of insurance, closer scrutiny reveals that this insurance-
like impression is solely a matter of appearance.




         6
           The plaintiffs err by asserting that “‘a state law regulates insurance if a common sense meaning of the language
of the statute indicates that it is specifically directed toward [the insurance] industry,’” Appellants Br. at 50 (quoting
Med. Mut. of Ohio v. DeSoto, 

, 573 (6th Cir. 2001)), and then relying on this standard to argue that WDCA
was not “enacted . . . for the purpose of regulating the business of insurance.” This standard relates to the ERISA savings
clause rather than to McCarran-Ferguson reverse preemption, and, as the Supreme Court has held, these standards are
distinct. See Ky. Ass’n of Health Plans, 

.
No. 05-2089           Brown et al. v. Cassens Transport Co. et al.                           Page 9


        Insurance is defined as “[a] contract by which one party (the insurer) undertakes to
indemnify another party (the insured) against risk of loss, damage, or liability arising from the
occurrence of some specified contingency.” BLACK’S LAW DICTIONARY (8th ed. 2004). There is
no contract in the worker’s compensation scheme. The district court attempts to dismiss the
importance of the lack of a contract under the benefits-as-insurance theory by stating that “[t]he
WDCA simply deprives the parties of their freedom of contract and, instead, imposes the benefits
and burdens of the predetermined bargain upon them.” Brown, 

at 810. However,
not only does this view fundamentally misconceive the nature of the worker’s compensation scheme,
it ignores the text of the McCarran-Ferguson Act, which only applies to state statutes that regulate
“the business of insurance,” 15 U.S.C. § 1012(b) (emphasis added), not those governing employers’
obligations to their employees for workplace injuries.
        The WDCA is a public regulation of the employment relationship that is a substitute for the
tort system rather than any contractual relationship between employees and employers. See
generally Richard A. Epstein, The Historical Origins and Economic Structure of Workers’
Compensation Law, 16 GA. L. REV. 775 (1982). In the context of true contractual accident-insurance
relationships, the insurer owes no preexisting duty to the insured to compensate the insured for any
injury that the insured may sustain. Rather, as with other contractual relationships, the insured
provides consideration in exchange for the insurer’s obligation to pay benefits upon the event of an
accident. By contrast, in the worker’s compensation context, the employer owed the employee a
preexisting duty under common-law tort to compensate the employee for workplace injuries due to
the fault of the employer. Mandatory worker’s compensation schemes, including the WDCA,
remove the employee’s obligation to prove negligence and causation in exchange for certain benefits
in the event of a workplace injury and relinquishing the right to sue (except in cases of intentional
torts). However, the employer is not akin to an insurer because it had a preexisting duty under
common law to compensate for workplace injuries, and worker’s compensation merely creates a
legislative remedy regarding the tort-liability relationship between employees and their employers,
not an insurance contract. There is therefore no insurer and no insured.
        Moreover, under the benefits-as-insurance view, the WDCA does not satisfy the Pireno

. The WDCA does not spread the policyholder’s risk because, as just
explained, there is no contractual insurance relationship and thus no policyholder in the WDCA
benefits-as-insurance approach. Further, the WDCA certainly is not limited to entities within the
insurance industry because the WDCA applies to all Michigan employers and employees except
those who are specifically exempted. MICH. COMP. LAWS § 418.111. Therefore, under the benefits-
as-insurance view, WDCA cannot be seen as addressing “the business of insurance” because the
WDCA is a mandatory, public regulation of the tort-liability relationship between employers and
employees rather than a regulation of the contractual insurance relationship that underlies “the
business of insurance.”
         Most important, we emphasize that whether the WDCA addresses any practices related to
“the business of insurance” is not the same inquiry as whether the WDCA was “enacted . . . for the
purpose of regulating the business of insurance.” “To equate laws ‘enacted . . . for the purpose of
regulating the business of insurance’ with the ‘business of insurance’ itself . . . would be to read
words out of the statute,” which the Supreme Court, and we, “refuse to do.” 

;
see also Ky. Ass’n of Health 

(emphasizing that the McCarran-Ferguson Act
is concerned with the purpose of the enactment of the state law); Genord v. Blue Cross & Blue
Shield of Michigan, 

, 806 (6th Cir. 2006). Therefore, the purpose for enacting the state
statute must be considered in assessing this element of McCarran-Ferguson reverse preemption. The
district court erred in failing to do so.
        The purpose of enacting the WDCA “was to require an employer to compensate a worker
for any injury suffered in the course of the worker’s employment, regardless of who was at fault.”
No. 05-2089           Brown et al. v. Cassens Transport Co. et al.                              Page 10


Edward Welch, Worker’s Compensation in Michigan: Law and Practice § 1.2 (4th ed. 2001);
accord Simkins v. Gen. Motors Corp., 

, 843-44 (Mich. 1996). In exchange for
certainty and ease of recovery for the employee, the employer’s liability was limited and defined by
making worker’s compensation the exclusive remedy except in cases of intentional torts. Welch,
at § 1.2; 

. The Michigan Supreme Court has stated that “[t]he
purpose of the [WDCA] as set forth in its title, is to promote the welfare of the people of Michigan
relating to the liability of employers for injuries or death sustained by their employees.” Whetro v.
Awkerman, 

, 785 (Mich. 1970). The WDCA’s focus on providing certain recovery
to employees for workplace injuries while limiting employers’ liability rather than the regulation
of insurance is underscored by a number of factors. The WDCA was placed in chapter 418 of the
Michigan Compiled Laws, which addresses labor matters, rather than in chapter 500, which contains
the Michigan Insurance Code. Additionally, the Worker’s Compensation Agency rather than the
Office of Financial and Insurance Services administers the WDCA. This indicates that the
provisions relating to insurance policies within the WDCA were included merely to effectuate the
WDCA’s primary goal of employee compensation.
        Our conclusion that worker’s compensation benefits are not insurance and our conclusion
that the WDCA was not “enacted . . . for the purpose of regulating the business of insurance,” each
independently foreclose the defendants’ argument that the WDCA reverse preempts RICO under
the McCarran-Ferguson Act. We additionally note that even in the absence of these conclusions that
preclude reverse preemption, the defendants’ insurance-provisions theory would not support their
reverse-preemption argument. The insurance-provisions theory views the WDCA as regulating “the
business of insurance” because there are a number of provisions in the WDCA regarding the
insurance an employer may buy to secure payment for worker’s compensation benefits. Under the
insurance-provisions theory, therefore, the employer is the insured and the company providing the
insurance is the insurer. There are several provisions of the WDCA that directly relate to the terms
of the insurance contract and thus to “the business of insurance.” See 

(indicating that a statute that “prescrib[es] the terms of the insurance contract” is one that “regulates
the ‘business of insurance’”). Michigan Compiled Laws § 418.621(2) states that every insurance
contract providing worker’s compensation-benefits coverage to employers must “insure, cover, and
protect in the same insurance policy, all the business, employees, enterprises, and activities of the
employer.” Section 418.621(4) states that “[e]xcept as modified by the director as provided for
herein, each policy of insurance covering worker’s compensation in this state shall contain the
following provisions,” and then lists the specific provisions of the insurance policy, which address
“Compensation,” “Medical services,” “Rehabilitation services,” “Funeral expenses,” “Scope of
contract,” “Obligations assumed,” “Termination notice,” and “Conflicting provisions.” Section
418.631(1), which sets forth the consequences for an insurer who fails to pay claims for
compensation, also relates to “the business of insurance” because it addresses the performance of
the insurance contract. See 

(“There can be no doubt that the actual
performance of an insurance contract falls within the ‘business of insurance.’”); 

(explaining how the performance of an insurance contract satisfies the Pireno test). One point is
crucial here: Cassens self insures. Therefore, the practices at issue in this case do not relate to those
provisions of the WDCA that address the “business of insurance.” Moreover, self-insurance does
not relate to the “business of insurance” under the McCarran-Ferguson Act because there is no
relationship between an insurer and an insured. See 

.
       Because worker’s compensation benefits are not a form of insurance and the insurance-
policy provisions are a minor element of the WDCA that was not part of the purpose for enacting
the law, the WDCA was not “enacted . . . for the purpose of regulating the business of insurance,”
and thus it does not reverse preempt the plaintiffs’ RICO claims.
No. 05-2089           Brown et al. v. Cassens Transport Co. et al.                           Page 11


B. RICO Would Not Invalidate, Impair, or Supersede the WDCA
         Although our conclusion that the WDCA was not “enacted . . . for the purpose of regulating
the business of insurance,” disposes of the defendants’ reverse-preemption argument, we note that
RICO is also saved from reverse preemption by the WDCA under the McCarran-Ferguson Act
because RICO would not “invalidate, impair, or supersede” the WDCA. RICO would not invalidate
or supersede the WDCA because RICO would not “render [the WDCA] ineffective” given that those
subject to these laws can comply with both simultaneously. See 

(“The
term ‘invalidate’ ordinarily means ‘to render ineffective, generally without providing a replacement
rule or law[,]’ [a]nd the term ‘supersede’ ordinarily means ‘to displace (and thus render ineffective)
while providing a substitute rule.’”). The question remains whether RICO would “impair” the
WDCA. In construing the term “impair,” the Supreme Court explained that “[w]hen federal law
does not directly conflict with state regulation, and when application of the federal law would not
frustrate any declared state policy or interfere with a State’s administrative regime, the McCarran-
Ferguson Act does not preclude its application.” 

        The WDCA bars and imposes sanctions on the denial of benefits to which employees are
legally entitled. MICH. COMP. LAWS §§ 418.631, 418.801. A RICO claim here would also act to
punish the improper denial of benefits if done as part of a pattern of racketeering activity. “To the
extent that the [state] law prohibited practices also prohibited under federal law,” the federal law
does not “frustrate a goal of [the state] law.” 

(internal quotation marks
omitted). Moreover, the federal interest in protecting individuals against a pattern of racketeering
activity based on fraud is “‘perfectly compatible’” with the state interest in providing a certain
remedy for employees who have suffered workplace injuries. 

The only aspect of RICO
that would arguably impair the WDCA is the difference in the remedies provided for under RICO
and the WDCA. RICO allows for treble damages and attorney fees, 18 U.S.C. § 1964(c), whereas
the WDCA provides that
       [i]f weekly compensation benefits or accrued weekly benefits are not paid within 30
       days after becoming due and payable, in cases where there is not an ongoing dispute,
       $50.00 per day shall be added and paid to the worker for each day over 30 days in
       which the benefits are not paid. Not more than $1,500.00 in total may be added
       pursuant to this subsection.
MICH. COMP. LAWS § 418.801(2). In Humana, the Supreme Court considered whether “a federal
law, which proscribes the same conduct as state law, but provides materially different remedies,
‘impair[s]’ state law under the McCarran-Ferguson 

. The Court answered this
question in the negative. 

        The Court’s conclusion in Humana applies equally here. First, Humana treats the
impairment consideration as an “as-applied” challenge that looks to whether the federal statute
would impair the state statute in a particular application. In Humana, the availability of punitive
damages under state law greater than the treble damages available under RICO supported the
conclusion that RICO did not impair the state 

. The Court held this even
though the state law would not allow for the imposition of punitive damages “when doing so would
threaten the solvency of the defendant” because “the record contains no evidence of insolvency
here.” 

n.12. Here, because Cassens self-insures, there is no risk of any impairment of the
state policy relating to the regulation of insurance. Therefore, a RICO suit in this case would not
impair the WDCA’s regulation of “the business of insurance.”
       Second, unlike the state law at issue in Humana, which was also directed at insurance fraud,
the WDCA provision regarding sanctions for failure to pay benefits does not appear to contemplate
the fraudulent denial of worker’s compensation benefits. Therefore, a RICO suit would not
No. 05-2089           Brown et al. v. Cassens Transport Co. et al.                              Page 12


contravene any “declared state policy or interfere with [the state’s] administrative regime,” which
does not address the fraudulent denials of benefits. 

(emphasis added).
The district court’s assertion that a RICO suit would impair the WDCA’s policy of limited liability
for employers relies on the faulty premise that the state has a policy of limited liability for employers
even when they fraudulently deny worker’s compensation benefits. No authority supports this
position. As in Humana, the fact that the state “filed no brief at any stage of this lawsuit urging that
application of RICO to the alleged conduct would frustrate any state policy, or interfere with the
State’s administrative regime” further supports the conclusion that there is no impairment here. 

We therefore hold that the WDCA does not reverse preempt RICO because the WDCA was
not “enacted . . . for the purpose of regulating the business of insurance” and because RICO would
not “invalidate, impair, or supersede” the WDCA.
               VI. INTENTIONAL INFLICTION OF EMOTION DISTRESS
        After dismissing the plaintiffs’ RICO claims, the district court proceeded to address their
state-law IIED claims, even though a federal court should typically decline to exercise pendent
jurisdiction over a plaintiff’s state-law claims after dismissing the plaintiff’s federal claims. See 28
U.S.C. § 1367(c)(3); United Mine Workers of Am. v. Gibbs, 

, 726 (1966). The district
court addressed these claims because it mistakenly believed that “the resolution of Plaintiffs’ IIED
claims is necessary to the Court’s determination of whether the WDCA reverse-preempts Plaintiffs’
RICO claims under the McCarran-Ferguson Act.” Brown, F. Supp. 2d at 813. As is clear from our
analysis above, the resolution of plaintiffs’ IIED claims has no bearing on the reverse-preemption
issue, which turns on the purpose of the WDCA and on RICO’s effect on the WDCA. Because in
this case the “‘interests of judicial economy and the avoidance of multiplicity of litigation’” did not
trump the interest in “‘needlessly deciding state law issues,’” the district court abused its discretion
in exercising pendent jurisdiction to decide the plaintiffs’ state-law claims. Moon v. Harrison
Piping Supply, 

, 728 (6th Cir. 2006) (quoting Landefeld v. Marion Gen. Hosp., Inc.,

, 1182 (6th Cir. 1993)). Despite the district court’s error in addressing the plaintiffs’
IIED claims, because we are reversing the dismissal of plaintiffs’ federal RICO claims, we will
proceed to review the district court’s decision dismissing the IIED claims.
        In construing questions of state law, a federal court must apply state law in accordance with
the controlling decisions of the highest court of the state. Meridian Mut. Ins. Co. v. Kellman, 

, 1181 (6th Cir. 1999). “The Michigan Supreme Court has never formally recognized
IIED as a cause of action.” 

(citing Roberts v. Auto-Owners Ins. Co., 

, 913 (Mich. 1985)); see also Smith v. Calvary Christian Church, 

, 595
(Mich. 2000) (Weaver, C.J., concurring). Assuming such a claim does exist, a plaintiff must show
the following elements to establish an IIED claim: “(1) extreme and outrageous conduct, (2) intent
or recklessness, (3) causation, and (4) severe emotional distress.” 

(internal quotation marks omitted). The Michigan Supreme Court has described “extreme and
outrageous conduct” as follows:
        It has not been enough that the defendant has acted with an intent which is tortious
        or even criminal, or that he has intended to inflict emotional distress, or even that his
        conduct has been characterized by “malice”, or a degree of aggravation which would
        entitle the plaintiff to punitive damages for another tort. Liability has been found
        only where the conduct has been so outrageous in character, and so extreme in
        degree, as to go beyond all possible bounds of decency, and to be regarded as
        atrocious, and utterly intolerable in a civilized community. Generally, the case is one
        in which the recitation of the facts to an average member of the community would
        arouse his resentment against the actor, and lead him to exclaim, “Outrageous!”

(internal quotation marks omitted).
No. 05-2089               Brown et al. v. Cassens Transport Co. et al.                                        Page 13


         In applying this standard, the Michigan Supreme Court held that a no-fault insurer’s “failure
. . . to facilitate the filing of a replacement services claim, a delay of at most six months in
responding to the claim as filed, and the denial of benefits owed” was insufficient to meet the
standard for outrageous conduct. 

In arriving at this conclusion, the court noted that
“[t]here is no indication that [the insurer] set out to harass these plaintiffs, nor does the evidence
disclose a course of conduct that may fairly be characterized as so outrageous in character . . . as to
go beyond all possible bounds of decency . . . .” 

marks omitted).
        We affirm the district court’s dismissal of the plaintiffs’ IIED claims because, like the
defendant’s conduct in Roberts, the plaintiffs’ allegations of defendants’ fraudulent denial of
worker’s compensation benefits are not “so outrageous in character . . . as to go beyond all possible
bounds of decency.” 

the Michigan Court of Appeals confirm this conclusion. That
court has explained that the “wrongful, bad faith termination of benefits, by itself, is not sufficiently
outrageous to support a claim for intentional infliction of emotional distress.” Atkinson v. Farley,

, 97 (Mich. Ct. App. 1988). Even the wrongful denial of worker’s compensation
benefits “to further some ulterior motive of the defendants,” as the plaintiffs here allege, is
insufficiently outrageous to support an IIED claim under Michigan law. Lisecki v. Taco Bell Rests.,
Inc., 

, 175 (Mich. Ct. App. 1986); accord Hajciar v. Crawford & Co., 

, 864 (Mich. Ct. App. 1985).7 For these reasons, dismissal of the plaintiffs’ IIED claims was
proper.
                                              VII. CONCLUSION
        We REVERSE the dismissal of plaintiffs’ RICO claims because their RICO claims are not
preempted by state law and because plaintiffs have adequately pleaded a pattern of racketeering
activity despite the lack of reliance on the defendants’ fraudulent acts and REMAND to the district
court for further proceedings consistent with this opinion. We AFFIRM the dismissal of the IIED
claims because the defendants’ alleged conduct cannot meet Michigan’s standard for outrageous
conduct.




         7
          In the district court, Cassens argued that § 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C.
§ 141, preempted plaintiffs’ IIED claims. The district court did not address this argument because it dismissed the IIED
claims under Rule 12(b)(6). The district court likely should have addressed the preemption question first because in
cases of LMRA preemption, the court must “recharacterize” the state cause of action as a federal claim and analyze the
claim under federal law. 14B Charles A. Wright, Arthur R. Miller, & Edward H. Cooper, Federal Practice and
Procedure § 3722.1 (3d ed. 1998). However, the defendants do not raise LMRA preemption on appeal, and thus we
simply review the district court’s decision to dismiss for failure to state a claim.