A federal judge in New York has dismissed a racketeering lawsuit by ride-sharing firm Uber against
several injury law firms, doctors and pain clinics alleging they conspired to extract inflated auto insurance claims payments through staged accidents, unnecessary surgeries and lawsui
Judge Orelia E. Merchant in Brooklyn ruled that Uber failed to show that the defendants wer
e part of a conspiracy to defraud Uber and failed to plausibly allege injury, as required to prove a violation under the federal Racketeer Influenced and Corrupt Organizations Act (RICO).
In order for RICO claims to survive a motion to dismiss, a plaintiff must offer “more than labels and conclusions” and must meet a “heightened particularity requirement” when pleading acts sounding in fraud or mistake, the opinion noted.
Uber contended that the law firms recruited passengers and referred them to the participating doctors and clinics. Uber claims the passengers were “uninjured or only lightly injured” but false evidence was used to conjure serio
us injury. Uber alleged that the law firms initiated litigation using the defendant doctors’ causation statements to assert that the passengers were seriously injure
d so that they could bypass the bar on non-economic damages under New York’s no-fault auto insurance Law and “fraudulently induce larger settlements” from Uber.
Uber noted that the New York judge’s dismissal is inconsistent with what judges have decided in similar cases in other states. “We believe this is a wrongly decided opinion and are considering all options available to us moving forward,” an Uber spokesperson told Insurance Journal.
Since at least 2019, Uber alleged, the group of defendants has conspired “to exploit passengers in purported or actual minor vehicle collisions.” Uber provided five state court cases in which it was named as a defendant and further alleged the defendants engaged in similar schemes in 12 other instances.
To establish a civil RICO claim, a plaintiff must show there was conduct by an enterprise through a pattern of racketeering activity, as well as injury to business or property as a result of the RICO violation. If successful, a plaintiff is entitled to threefold damages.
The judge found that Uber failed to show that the lawyers and medical providers were an “‘association-in-fact” enterprise with a common purpose, relationships, and sufficient longevity. Uber failed to show that the lawyers an
d doctors acted with a common purpose to defraud Uber rather than that they acted in their own business interests. Uber also failed to show how the medical clinics managed to take bribes, misdiagnose passengers, or produce false causation statements.