HOUSTON (Legal Newsline) - Insurance companies who disagreed with a federal magistrate judge who felt their RICO lawsuit against Houston-area chiropractors have lost.
Houston federal judge George Hanks adopted the report and recommendations of Magistrate Judge Andrew Edison on March 27, tossing claims made by companies including Farmers Insurance 21st Century Centennial
They had filed their objections the day before to the R&R that said they failed to show on an ongoing enterprise among 23 defendants.
"(T)he amended complaint is devoid of any allegations that the chiropractic clinics, pain management companies, and medical professionals named as Defendants existed separate and apart from the alleged pattern of racketeering," Edison wrote March 12.
The plaintiffs were suing defendants like 1st Choice Accident & Injury, Houston Pain Relief & Wellness Clinic and Smart Choice Chiropractic.
They alleged fraudulent billing for services not needed led to more than $14 million in damages and filed a lawsuit under the Racketeer Influenced and Corrupt Organizations Act in 2022.
The insurers' objections sought to convince Judge Hanks that their complaint sufficiently alleges a RICO enterprise.
"The memorandum incorrectly states that items are conclusory when, in reality, Plaintiffs give very specific factual allegations and examples of the parties working together," the objections say.
"The amended complaint alleges control, the participation of each defendant, the relationship and the actions by each defendant that establishes a continuing unit."
The alleged scheme involves treatment for drivers involved in car accidents.
That treatment includes fraudulent exam reports, fraudulent billing and medical reports and the supply of those reports to personal injury lawyers, the suit says.
“The Defendants’ scheme is designed to enrich Defendants by inducing Farmers to rely on their bills and supporting documentation that on their face purport to substantiate the need for medical treatment and (2) settle BI and UM Claims within policy limits, and often for all or most of the limits, to protect Farmers and their insureds from potential judgments exceeding policy limits and/or avoid potential liability for bad-faith claims,” the suit says.