Theodore Roosevelt United States Courthouse in Brooklyn
BROOKLYN, N.Y. – Racketeering lawsuits against a New York network of personal-injury lawyers, doctors and lenders are having trouble finding their footing, as this week a federal judge dismissed another complaint.
Judge Nina Gershon’s March 11 ruling against the reinsurer Roosevelt Road Re comes a month after one of its other cases was tossed. That February ruling said Roosevelt couldn’t show how it was directly impacted by allegations that lawyers are driving up the costs of lawsuits by sending clients to doctors who perform unnecessary medical procedures.
Though Roosevelt said it foots the legal defense costs whenever its customers are sued, Judge Brian Cogan said it couldn’t show it had standing to sue William Schwitzer & Assoc. and others.
Gershon, in Roosevelt’s case against Gorayeb & Associates, cited the first tossed complaint – against the firm Subin Associates – in finding any financial harm to Roosevelt and claims manager Tradesman is “two steps removed from Defendants’ alleged misconduct.”
“Indeed, the [First Amended Complaint] does not allege the specific cause of the injuries Tradesman sustained,” Gershon wrote.
“To be sure, the FAC alludes to ‘expenses incurred for the administration of these claims and the retention of additional staff to perform investigative and support services for claims’ submitted by Legal Services Defendants. But there is nothing in the FAC to suggest that Tradesman was not compensated for these expenses by the insurers and reinsurers for which it worked, or that the additional staff was necessitated by Defendants’ alleged misconduct rather than Tradesman’s contractual duty to scrutinize every claim.”
Gershon went further, writing that even if the plaintiffs could have shown their injuries were caused by Gorayeb and others, they failed to show those defendants were acting as one enterprise – a requirement for RICO lawsuits.
Gorayeb said it does not share a common purpose with the doctors and lenders named as co-defendants and does not have interpersonal relationships with them. Gershon agreed.
“To be sure, one Medical Service Provider’s allegedly fraudulent behavior may have benefitted other Defendants,” Gershon wrote.
“For example, exaggerated radiological findings may have been used to justify unnecessary physical therapy or surgery, which was then performed by another defendant or at another defendants’ facility. But the FAC does not allege facts suggesting that one defendant intended to benefit any other defendant.”
Gershon is allowing Roosevelt to file another amended complaint to try to cure the deficiencies she pointed out.
The alleged scheme has lawyers directing clients to doctors they know will bill for unnecessary surgeries and to lenders who offer up-front cash for a large piece of whatever is recovered in the lawsuit, leaving plaintiffs – frequently undocumented immigrants – with scars and a few bucks after the lawyers, doctors and lenders take their cuts.
