“RICO Lawsuits Are Taking Aim at Lawyers” —

• “A series of cases are testing whether racketeering claims can serve as a counteroffensive against opposing counsel. The lawsuits assert that alleged misconduct surrounding the business of building litigation can itself become the basis for racketeering cases against attorneys.”
• “Defendants have primarily deployed the tactic against personal injury and mass tort attorneys, with litigation from Uber Technologies Inc. emerging as one of the most prominent examples of the approach. The jury is still out on whether these claims can stick, with courts issuing mixed results as they begin weighing the legal theory.”
• “Uber has also hit several attorneys filing collision cases with suits alleging that they violated the federal Racketeer Influenced and Corrupt Organizations Act, or RICO Act, by collaborating with health care professionals to inflate medical costs and expand damages claims. In recent months, several judges have started testing the viability and limits of that strategy.”
• “Last month, U.S. District Judge Orelia Merchant of the Eastern District of New York dismissed Uber’s case against Wingate, Russotti, Shapiro, Moses & Halperin, finding deficiencies in Uber’s allegations of a RICO enterprise, conspiracy and injury. Merchant also concluded that Uber had not plausibly alleged that the defendants shared the necessary ‘common purpose.'”
• “‘At best,’ Merchant wrote, the allegations showed the doctors ‘received benefits incidental to an ordinary and lawful client-referral relationship and third-party litigation financing of medical treatment …’ rather than sharing a common purpose of fraudulent conduct.”
• “A California judge, however, reached the opposite conclusion over Uber’s allegations against another group of plaintiffs firms. U.S. District Judge Sherilyn Peace Garnett of the Central District of California found that Uber had plausibly alleged a relationship that went beyond an ordinary commercial relationship between attorneys and a spine surgeon. Garnett pointed to allegations suggesting the defendants acted in furtherance of a ‘common purpose’ of generating inflated medical bills to extract higher settlements from plaintiff.'”
• “Meanwhile, in an Aug. 27 ruling, U.S. District Judge Mark A. Kearney of the Eastern District of Pennsylvania rejected personal injury firm Simon & Simon’s counterclaims that RICO litigation from Uber and FedEx constituted sham litigation, among other claims.”
• “Still, the first sentences of Kearney’s ruling acknowledged the stakes for the defendants in these cases. ‘We appreciate experienced personal injury lawyers and doctors do not like reading their names in federal court complaints alleging their specific roles in alleged racketeering conduct,’ he wrote. ‘Especially when those allegations are made by companies Uber and FedEx whom they often sue in Philadelphia County seeking to recover for alleged personal injury losses subject to the state court judge’s and jury’s scrutiny. And then these allegations show up in press reports.'”
• “Simon & Simon is now claiming that Uber does not have sufficient financial stake in the underlying litigation, arguing its insurer Farmers Insurance Exchange has covered all settlement and defense costs in the litigation.”
• “‘This is a full stop,’ wrote the firm’s Blank Rome attorneys. ‘Discovery definitively shows that Uber has paid nothing and has no harm. Precedent is clear that a RICO lawsuit cannot be sustained where a secondary source, like Farmers, is paying the alleged damages. There is no caselaw in any jurisdiction that would support allowing Uber to continue with a RICO case in light of this admitted lack of standing. Only Farmers has standing to bring this RICO action.'”
• “The emerging litigation tactic is a response to so-called nuclear verdicts and high-volume litigation in certain jurisdictions, according to some experts.”
• “Regardless of how federal RICO claims against attorneys fare, they are unlikely to be the last attempt by corporations and their defense counsel to turn litigation against the lawyers who regularly sue them.”
• “In Georgia, for instance, the state Supreme Court is considering a case that could clarify when attorneys can pursue competing lawyers under the Georgia RICO Act. The case involves a plaintiffs attorney who alleges a competing firm engages in case running, or illegally obtaining accident victim data to solicit them before other lawyers can.”
• “Companies are already testing alternatives when RICO claims fail. After Ford’s racketeering case against Los Angeles Lemon Law attorneys was dismissed, the company’s Kasowitz counsel filed a complaint in June alleging plaintiffs’ firm Quill & Arrow lures customers through fraudulent advertising and convinces them not to participate in its repurchasing offer.”
• “As the financial stakes surrounding personal injury and mass tort litigation rise, plaintiffs attorneys could increasingly find themselves on the other side of the ‘v.’ RICO may be only one theory corporations and their defense counsel test in litigation aimed not merely at defeating individual claims, but at challenging the conduct of the lawyers bringing them.”

“Womble Bond Can’t Quit Dutch Client With TM Trial Looming” —

• “Womble Bond Dickinson can’t withdraw from a trademark feud that’s dragged on for more than five years between U.S. and Dutch software companies, a North Carolina federal judge ruled, saying the firm’s exit at this late stage ‘would be completely disruptive.'”
• “U.S. District Judge Martin Reidinger on Monday denied Womble Bond’s request to pull its representation of Dutch software company DMARC Advisor BV, in which the firm claimed withdrawal was necessary because of a ‘fundamental disagreement about the conduct of this litigation.’ According to Judge Reidinger, Womble Bond declined to provide the particulars of its rift with the client, even for in camera review.”
• “‘In short, counsel has left the court in the dark as to whether there is good cause for their withdrawal. Counsel’s assertion that the court should simply trust their word is simply unavailing,’ the judge wrote.”
• “‘It is counsel’s obligation to demonstrate cause. A bare assertion of a ‘fundamental disagreement’ might be sufficient if it were very early in the case and such withdrawal would work no prejudice to any party,’ he continued. ‘But here, 5½ years into a case and upon the doorstep of trial, such a bare assertion is simply insufficient.'”
• “Judge Reidinger also called out the paradox of the firm’s request given the events that preceded it. Previously, DMARC Advisor and one of its attorneys at Womble Bond were held in civil contempt for failing to correct misrepresentations allegedly made to a court in the Netherlands in a parallel lawsuit.”
• “As punishment, Judge Reidinger suspended the attorney, Pressly Millen, from practicing in the Western District of North Carolina until the case was resolved or he apologized to the foreign tribunal. The Fourth Circuit reversed his order on appeal this summer, finding it to be ‘overtly punitive.'”
• “In Monday’s opinion, Judge Reidinger said it is ‘ironic’ that DMARC Advisor’s counsel appealed the suspension ‘on the grounds that the defendant would be unduly prejudiced by being deprived of an attorney so knowledgeable of the case.'”
• “‘Now, upon the Court of Appeals reversing the court’s sanction and reinstating that attorney, that same attorney and his firm now move to withdraw,’ the judge wrote.”
• “The case dates to 2021, when North Carolina-based software company Dmarcian Inc. first sued DMARC Advisor over the ownership, licensing and use of certain source code.”