A federal racketeering lawsuit against a Philadelphia law firm and health care providers alleged to have artificially boosted the value of lawsuits can proceed, a judge has ruled.
Judge Mark Kearney on Tuesday denied the motion to dismiss by Simon & Simon and others, finding Uber and FedEx adequately alleged a scheme in which car-wreck plaintiffs receive false diagnoses and treatments that make their lawsuits worth more than $50,000.
That’s a threshold to keep the cases out of arbitration proceedings, allowing plaintiffs to try to score large verdicts and settlements in court. The case is one of a handful around the country filed by Uber, which is a popular target for lawsuits. In New York, Uber and FedEx are alleging accidents involving their vehicles are staged.
Other plaintiffs lawyers accused of RICO violations have successfully argued plaintiffs can’t show the required conspiracy, but Kearney is allowing claims to move ahead in this case.
“They may be shown correct soon enough,” Kearney said. “But we are reviewing allegations and today allow the parties to proceed with discovery including into the extent the doctors’ reports informed the lawyers’ decision to bring these cases and then seek more than $50,000 in their complaints. And whether these lawyers’ statements of ‘severe’ injuries and ‘disfigurement’ are fraudulent.
“We also need to understand if the lawyers’ and doctors’ conduct caused Uber and FedEx to pay legal fees and settlements rather than continue disputing the underlying claims on the merits.”
The case against Simon & Simon targets dozens of lawsuits filed in Philadelphia state court in the last four years. Uber and FedEx say crash victims have minimal or no injuries from accidents, yet the law firm sends them to specialists like Philadelphia Spine Associates and Premier Pain & Rehab Center for treatment.
These chiropractors and physical therapists arrange for MRIs and give their own treatment, creating a high volume of records reflecting extensive care, the lawsuit says. It is alleged that doctors often do not deliver treatment as described but instead sign boilerplate statements indicating it was done.
Another doctor performs a procedure for pain management that involves a needle to heat and destroy nerve tissue, FedEx and Uber allege. That doctor says it was necessary due to the patient’s pain, they say.
Ultimately, the goal of the scheme is to inflate the worth of personal-injury claims, and that has led the two plaintiffs to paying more in settlements than they should have, they say.
Judge Kearney refused to accept the defendants’ initial arguments, like they are afforded immunity from the First Amendment Petition Clause that protects their right to advocate for injured clients.
However, the conduct at issue occurs before a lawsuit is ever filed, Kearney noted.
“We do not treat this conduct as petitioning activity merely because the lawyers later used the medical records in setting demands,” he wrote.
There is a “sham litigation” exception to that immunity that applies even if the medical treatment counts as petitioning, Kearney added.
“These allegations, if true, support a plausible inference the lawyers and doctors misused the governmental process and pursued a policy of starting legal proceedings without regard to merit,” Kearney wrote.
“The dismissal of claims against Uber (seemingly the alleged primary tortfeasor) immediately following discovery requests permits the inference the lawyers did not intend the filings to adjudicate claims on the merits but to leverage the litigation process itself.
“Taken together, these allegations place in dispute whether the lawyers filed the cases not out of a genuine interest in redressing grievances, but as part of a pattern or practice of successive filings undertaken for purposes of harassment and to extract settlement value through the process of litigation.”
