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Copyright 2007 North Jersey Media Group Inc.,
All Rights Reserved
Herald News (Passaic County, NJ)
March 25, 2007 Sunday
All Editions
OUR TOWNS; Pg. B01
946 words
Tables are turned on factory workers;
Court has awarded business more than $2M in damages
By JOHN PETRICK, Special to the Herald News, North Jersey Media Group
Greg Jachts says he believes workers of the old Melard factory in Passaic who tell him about the blue dye they'd see when blowing their noses. The hearing loss they've experienced from loud machinery. The pulmonary problems they're experiencing to this day.
What he can't believe is the irony in a recent federal default judgment that orders the workers ? not the factory owner ? to pay more than $2 million in damages. The company sued the workers, claiming they banded together to fake their ailments and file fraudulent workers' compensation claims. The workers didn't put up a fight, apparently because they didn't know or understand they were being sued. As a result, the company won its case by default.
"This is an attempt to bully them from going forward," says Jachts, a court-appointed attorney representing 84 factory employees in their state workers' comp cases. "I think there's going to be a big effect. There are other employers that are going to try and do this. ... The chilling effect is there."
The workers filed their claims after being laid off from the Melard plant ? which manufactured plastic bathroom parts and packaged other items ? in 2002. In 2004, Bath Unlimited, Melard's owners, sued the workers and a law firm then representing them under the federal Racketeer Influenced and Corrupt Organizations Act. It accused both the workers and their lawyers of conspiring to defraud the company by making false injury claims. While the lawyers settled their part of the case with the company in a sealed agreement, the workers — now without attorneys — did not respond in the federal case.
"These people are factory workers. Most of them are immigrants. Most are Hispanic. They aren't sophisticated," says Jachts, saying they simply didn't know or understand what was happening. Many of the workers, Jachts said, made around $17,000 a year. The workers didn't file any kind of legal response to the case and didn't have legal representation to do so.
As a result, U.S. District Judge Stanley Chesler signed a default judgment last week against the 84 former factory workers, finding them liable to repay the company's attorneys' fees, costs, compensatory damages and workers compensation awards that two of the workers have obtained since the layoffs. The total judgment comes to $2.26 million.
In a statement reacting to the case's outcome, Masco, the Michigan-based parent company of Bath, said: "We wholeheartedly agree with the court's decision and the important principles that it underscores. The workers' compensation system, and its goal of compensating workers who suffer legitimate worker-related injuries, is far too important to be subjected to abuse and fraud."
But Jachts, a Paterson attorney, and other observers worry that the message the federal judgment sends is one that will make people with legitimate injuries afraid to file workers' comp claims, for fear of being sued.
"People are going to be hesitant to be involved in any occupational case because, quite frankly, to get sued in federal court is very expensive, even if you've done nothing wrong," Jachts says.
The state appointed Jachts to represent the workers in February 2006 because their previous lawyers — then a target in the federal case — could no longer represent them. Jachts says he will continue to litigate the remaining pending cases. The outcome of the federal suit doesn't automatically make those cases go away, but he's prepared to fight if Bath makes a motion to dismiss them in light of what's happened.
"It's possible some people don't have any injuries. But there is a mechanism for dealing with that and it shouldn't be by default and it shouldn't be in a situation where these people can't defend themselves," he says.
Because he's handling the state cases, Jachts can't get involved in the federal one. But he said there are a number of attorneys who are considering taking it over and filling a motion to dismiss the judgment. If it were to stand, Jachts says the court could place liens on workers' homes or garnish their wages to collect the money.
About 38,000 to 40,000 cases are filed annually in state Workers' Compensation Court, according to Kevin Smith, spokesman for the state Department of Labor.
The concept of suing a group of workers as a racketeering enterprise in this kind of case appears unique ? and puzzling, says Barry Cohen, managing partner of Gelman and Gelman, Wiskow and McCarthy of Elmwood Park. The law firm has handled numerous workers' comp cases over the years. Cohen noted that it isn't unusual for workers to wait until they're laid off to file claims because of fear that suing while employed could jeopardize their jobs. A large group filing claims under the same law firm is hardly conspiratorial, he says. "If a number of people come to a law firm with the same complaint, arising from the same employer, it wouldn't be unusual for the attorney to then see if others are experiencing the same disability," he says.
He and Jachts both also note that there are only a handful of doctors in the state who do workers' compensation examinations. Thus, any suggestion that people picked their own sympathetic doctors to exaggerate ailments doesn't wash, they say. The kinds of tests conducted for workers' comp claims ? such as pulmonary tests — can't be fudged, Cohen says.
"It isn't like whiplash, where you say it hurts but nothing shows up on a screen," he says.
"These people appear to be victims. They don't know the comp system well enough to commit this kind of fraud," says Cohen. As for a chilling effect locally, Cohen says there aren't many more big manufacturing plants left in the area so there's not much left to chill.
March 26, 2007
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