A federal judge in New York has dismissed lawsuits by ridesharing giant Uber and an insurance company that accused plaintiff lawyers of operating racketeering rings with doctors and financial firms to profit off of staged accidents and inflated medical bills.
Saying “there is no plausible interpretation that the defendants ‘all agreed to join forces with each other,’” U.S. District Judge Orelkia E. Merchant dismissed the lawsuits against multiple law firms, doctors and litigation finance firms.
Uber and Union Mutual Fire Insurance accused law firms including Subin Associates, Wingate Shapiro, Banilov & Assoc. and others of recruiting illegal immigrants and poor people as clients and referring them to a small circle of doctors who provided inflated medical bills and opinions linking their injuries to traffic and workplace accidents. Many of those accidents were either minor or staged, Uber and Union Mutual said.
Many of these cases are well documented by publications including Newsday and Legal Newsline. At the bottom of the alleged schemes is the plaintiff, often a poor and undocumented immigrant, who signs off on open-ended, high-interest loans in exchange for a modest amount of cash up front and agrees to be seen by doctors affiliated with the law firm. The doctors receive higher payments than they would under insurance, and financial firms reap interest on client loans and the difference between what they pay doctors and the damages awarded in court or through settlements.
However, neither Uber nor Union Mutual provided enough evidence to convince Merchant to allow their cases to proceed to trial. Her core objection was that neither company could show how the doctors or the law firms worked together for a “common purpose” as required under the Racketeer Influenced and Corrupt Practices (RICO) Act.
While each doctor might be providing evidence to support plaintiff cases in exchange for a steady stream of referrals, she said, there was no evidence the doctors were conspiring with each other.
“Uber has failed to allege that the doctor defendants acted for the common purpose of the enterpriser, but rather that they acted for their own business interests,” the judge wrote.
Uber only provided one example of alleged overbilling. That was when a doctor charged $38,000 for a spinal procedure where the median charge was $20,000, the judge said. That didn’t support claims doctors routinely submit excessive bills. The judge didn’t address claims doctors routinely accept cash payments far less than they bill in arrangements where they sell their bills to finance companies who seek the difference in court.
The judge dismissed both lawsuits without the option of amending them.
