RICO Tag Archives — Kang Haggerty News

When the Lawyer Becomes the Defendant: RICO Comes for the Personal Injury Bar

Edward T. Kang — Thu, 16 Jul 2026 20:01:47 +0000

In Uber Technologies v. Simon & Simon, Judge Mark Kearney denied a motion to dismiss a RICO complaint filed by Uber and FedEx against the Philadelphia plaintiffs firm Simon & Simon, P.C. and a network of medical providers. The 54-page opinion charts how corporate defendants frame “systemic fraud” and what RICO plaintiffs must plead to survive a Rule 12 motion.

In the July 9, 2026 edition of The Legal Intelligencer, Edward Kang writes, “When the Lawyer Becomes the Defendant: RICO Comes for the Personal Injury Bar.”

For decades, civil RICO, 18 U.S.C. Sections 1961 et seq., with its treble damages and fee-shifting provisions, has been used primarily by plaintiffs for claims involving fraud and organized wrongdoing. A notable countertrend has emerged: corporate defendants are turning RICO against the plaintiffs lawyers who sue them, alleging that some high-volume personal-injury practices have crossed from advocacy into fraud. In Uber Technologies v. Simon & Simon, 2026 WL 1284178 (E.D. Pa. May 11, 2026), Judge Mark Kearney denied a motion to dismiss a RICO complaint filed by Uber and FedEx against the Philadelphia plaintiffs firm Simon & Simon, P.C. and a network of medical providers. The 54-page opinion charts how corporate defendants frame “systemic fraud” and what RICO plaintiffs must plead to survive a Rule 12 motion.

The Alleged Scheme
According to the complaint, over several years, Simon & Simon filed dozens of suits on behalf of clients with minimal or no injury, many with limited-tort coverage capping recovery at out-of-pocket expenses. The firm allegedly directed clients to a “conveyor belt of preselected treatment providers and medical experts”: chiropractors generating high volumes of treatment records; a pain specialist performing radiofrequency ablations on a flat per-procedure basis; and an examining physician who confirmed serious, permanent, accident-related injury in every reported case. Those records allegedly converted low-value claims into demands exceeding $50,000, avoiding compulsory arbitration and driving inflated settlements.

At the core of the RICO predicates were transmissions of false records by mail and interstate wire, which the court held Uber pleaded with Rule 9(b) particularity by identifying each participant, each record, the providers’ roles, and the means of transmission and use in litigation demands. Uber further alleged that roughly 30 suits were voluntarily dismissed immediately after it subpoenaed the pain-management provider, supporting an inference that those filings were leverage rather than merit-driven.

The RICO Architecture at the Pleading Stage
The court held Uber sufficiently pleaded an association-in-fact enterprise under Section 1962(c), which has become the most commonly used Section other than Section 1962(d) (relating to conspiracy), by alleging common purpose, relationships, and longevity, with a pattern formed by mail and wire fraud. On proximate cause, the usual stumbling block, the court accepted Uber’s theory that it incurred defense costs and paid inflated settlements it would not otherwise have paid, rejecting any first-party reliance requirement under Bridge v. Phoenix Bond & Indemnity, 553 U.S. 639 (2008).

Noerr-Pennington, Petitioning, and the ‘Whole Scheme’ Lens
Defendants invoked Noerr-Pennington and the petition clause as absolute immunity for petitioning activity, but the court focused on the level of generality: Uber and FedEx did not sue over any single complaint; rather, they alleged a coordinated racketeering scheme and that lawsuits were just part of that scheme. Filing lawsuits is protected petitioning, but the court distinguished the pre-filing direction to providers and the manufacture and transmission of false records—communications with third parties not directed at a court or opponent—as conduct outside the doctrine’s core protection.

Following Judge Stephanos Bibas’ March 2026 decision in Montway v. Navi Transport Services, 2026 WL 866290 (D. Del. Mar. 30, 2026), the court treated such third-party communications as not “incidental” to petitioning. Alternatively, even if deemed petitioning, the court found the sham-litigation exception plausibly alleged under the California Motor “series-of-petitions” test because the suits were alleged to have been filed without regard to merit, to inflict litigation costs, and the alleged falsehoods went to the core of the claims (existence, causation, and severity of injury), not merely to damages inflation.

Litigation Activity as a Predicate Act
Defendants relied on the U.S. Court of Appeals Third Circuit’s Applebaum v. Fabian, 2022 WL 17090172 (3d Cir. Nov. 21, 2022), to argue that fraudulent litigation activity cannot qualify as a RICO predicate. Judge Kearney read Applebaum narrowly: it barred a claim resting on litigation fraud and perjury alone, arising from a single probate dispute without cognizable mail or wire-fraud predicates. After surveying authorities cited in Applebaum, the court adopted the Kim v. Kimm, 884 F.3d 98, (2d Cir. 2018) line of cases and State Farm Mutual Automobile Insurance v. Tri-Borough New York Medical Practice, 120 F.4th 59 (2d Cir. 2024). Those decisions distinguish between litigation activity “without more” (not a predicate) and a coordinated, multi-actor scheme that uses mail and interstate wires to manufacture and monetize false evidence (which can support RICO). Thus, while each filing alone is a protected petitioning, the filings can function as the cash-out mechanism of a broader racketeering enterprise when combined with pre-filing fabrication and transmission of false records.

Filing Suit Is Protected—But Not Absolutely
The court’s whole-scheme approach aligns with familiar limits under Pennsylvania law. The Dragonetti Act permits suit for wrongful use of civil proceedings, and the tort of abuse of process addresses misuse of the court’s process for an improper purpose, even if the underlying claim is valid. These doctrines reflect a basic principle that petitioning is not a license to weaponize litigation. Noerr-Pennington may shield isolated petitioning acts but does not immunize fraudulent schemes that enlist litigation as the end-stage mechanism.

Not an Isolated Case
Uber has filed parallel RICO actions in Los Angeles, New York, and Florida, alleging attorney-directed referrals to preselected providers on lien arrangements, and within days of the ruling, it filed a notice of supplemental authority citing a California decision in its favor. RICO’s remedies, treble damages, fee-shifting, and, as pleaded by Uber, potential divestiture and dissolution, raise existential stakes for targeted firms.

On June 8, 2026, the Simon defendants filed counterclaims against Uber and FedEx for sham litigation, abuse of process, and extortion, contending that the RICO case is the actual sham.

Strategic Takeaways for Plaintiffs-Side Lawyers
This is neither a defense of fraud nor an attack on the plaintiff’s bar. The overwhelming majority of personal injury lawyers do not fabricate records or run kickback networks. But the rise of these suits should concern every personal injury plaintiff’s lawyer, and the risk is structural. Large defendants now have a tested playbook for turning a routine practice into a federal racketeering investigation, and the mere filing, even of a suit that ultimately fails, triggers costly, reputation-damaging discovery into referral relationships, internal communications, and intake procedures. Personal injury lawyers who rely on networks of treating providers should re-examine those relationships now. Arrangements involving providers whose diagnoses consistently support large claims may be litigated as evidence of an enterprise, and firms that cannot show arm’s-length dealings and independent medical judgment will be at a disadvantage.

At the same time, the same doctrinal architecture remains available to plaintiffs harmed by coordinated corporate schemes. Where a pattern of mail or wire fraud, an enterprise, and proximate injury to business or property converge, civil RICO remains among the commercial litigator’s most potent tools.

Practical Lessons From Uber for RICO Plaintiffs
Predicate particularity: Plead the who/what/when/where/how for mail/wire transmissions; identify participants, document types, transmission paths, and how false records monetized the scheme.
Proximate cause: Articulate direct injury (e.g., inflated settlements/defense costs or business/property harms) and address apportionment as a fact issue consistent with Bridge.
Noerr-Pennington framing: Focus allegations on pre-filing fabrication and third‑party communications; plead sham‑litigation under the series‑of‑petitions test where suits were filed without regard to merit.
Litigation activity “plus”: Distinguish isolated litigation misconduct from a coordinated, multi‑actor enterprise using mails/wires to manufacture and monetize false evidence.
Remedies and relief: Align remedies to enterprise scope and injury; preserve treble damages and fee-shifting; consider structural relief only where supported by facts already pleaded.

Conclusion

Uber signals a maturing consensus: fraud does not become protected advocacy merely because it is tethered to litigation. At the pleading stage, plaintiffs who frame the whole scheme—pre-filing fabrication, third‑party communications, coordinated use of mails and wires, and litigation as the monetization endpoint—can withstand Noerr-Pennington and “litigation activity” objections while plausibly alleging enterprise, pattern, and proximate cause. For plaintiffs-side lawyers, the message cuts both ways. Use RICO aggressively when the facts show coordinated fraud and direct injury; fortify your own practices to avoid having routine litigation activity recast as racketeering. And remember the posture: these are Rule 12 rulings. The proof, apportionment, and boundaries of petitioning immunity will be tested in discovery and beyond.

Edward T. Kang is the managing member of Kang Haggerty. He devotes the majority of his practice to business litigation and other litigation involving business entities. Contact him at ekang@kanghaggerty.com.

Reprinted with permission from the June 11, 2026 edition of “The Legal Intelligencer” © 2026 ALM Global, LLC. All rights reserved. Further duplication without permission is prohibited. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more information visit Asset & Logo Licensing.

Legal Intelligencer: Civil RICO’s Expanding Reach: From Foreign Schemes to Lost Employment

Edward T. Kang — Thu, 07 Nov 2024 19:51:21 +0000

Some recent cases, such as Yegiazaryan v. Smagin and Medical Marijuana v. Horn, show that the courts are grappling with the statute’s injury requirement and might expand the sense of hope for plaintiffs.

In the November 7, 2024 edition of The Legal Intelligencer, Edward Kang writes, “Civil RICO’s Expanding Reach: From Foreign Schemes to Lost Employment.”

The racketeer influenced and corrupt organizations (RICO) statute has seen a surge in prominence in recent years, valued by plaintiffs for its ability to allow for access to the federal court system, address patterns of illicit conduct, and award treble damages and attorney fees. Originally intended by Congress to dismantle organized crime, civil RICO’s appeal has broadened as the federal courts witnessed an increase in the use of civil RICO against business enterprises. In response to its increased use, courts have attempted to limit the reach of civil RICO. However, some recent cases, such as Yegiazaryan v. Smagin and Medical Marijuana v. Horn, show that the courts are grappling with the statute’s injury requirement and might expand the sense of hope for plaintiffs.

The Core Issue in ‘Medical Marijuana v. Horn’

In Medical Marijuana v. Horn, the U.S. Supreme Court faces the question of whether economic losses tied to personal injuries, such as lost wages, can constitute an injury to “business or property” actionable under RICO. The case revolves around a former truck driver who consumed a CBD product marketed by the CBD companies as free of THC but lost his job after a failed drug test. In 2015, a federal district court dismissed the driver’s RICO claim, holding that he lacked RICO standing because his loss of earnings was derivative of an antecedent personal injury. The U.S. Court of Appeals for the Second Circuit reversed the ruling and reinstated the RICO claim, and the petitioners CBD companies appealed to the Supreme Court.

At oral argument, advocates tried to delineate the boundaries of a RICO injury. The petitioners argued that the “harm” caused by the ingestion of the CBD product was a personal injury claim outside civil RICO. Conversely, the respondent argued that ingestion is not particularly critical in his case and that the right not to be harmed by the predicate acts, in this case, the alleged fraudulent inducements of the CBD companies, is protected by civil RICO.

This pending case will resolve a split among federal circuits on whether civil RICO allows plaintiffs to seek damages for economic losses tied to personal injuries. The Second and Ninth Circuits have permitted such claims, while several other circuits have ruled that the “business or property” requirement in RICO excludes harms linked to personal injuries. See, e.g., Jackson v. Sedgwick Claims Management Services, 731 F.3d 556 (6th Cir. 2013); Keller v. Strauss, 480 Fed. Appx. 552 (11th Cir. 2012); Evans v. City of Chicago, 434 F.3d 916 (7th Cir. 2006).

Horn’s case is not the first time the Supreme Court has dealt with questions regarding the scope of RICO injury. Past decisions have provided guidance on what qualifies as an injury to “business or property.” In Sedima, S.P.R.L. v. Imrex, 473 U.S. 479 (1985), a Belgian corporation sued its business partner, an American corporation, claiming that the partner engaged in mail and wire fraud, which effectively restricted its profits. Overturning the lower court’s ruling that the plaintiff did not have standing because it failed to present a “racketeering injury” distinct from the injury resulting from the predicate acts, the court explained that “the compensable injury necessarily is the harm caused by predicate acts sufficiently related to constitute a pattern, for the essence of the RICO violation is the commission of those acts in connection with the conduct of an enterprise.” The respondent in Horn relied on this case to argue that his economic injury due to lost employment is redressable under RICO. On the other hand, cases like Anza v. Ideal Steel Supply, 547 U.S. 451 (2006) reiterated that for a civil RICO plaintiff to have standing, the injury must have a direct causal connection to the defendant’s racketeering activities. The petitioners in Horn argue that Horn’s lost wages are too indirect, as they flow from and are derivative of his personal injury.

The proponents for a broad interpretation of an injury to “business or property” also find support in RICO statute’s legislative history. The civil RICO damages language in subsection 1964(c), which allows treble damages to “any person injured in his business or property by reason of a violation of section 1962,” is closely modeled after Section 4 of the Clayton Act, which provides for treble damages to “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws.” Moreover, the chief discussion in the legislative history of civil RICO damages includes a characterization of subsection 1964(c) as “another example of the antitrust remedy being adopted for use against organized criminality.” Under the Clayton Act, courts construe “business or property” broadly and inclusively. See Reiter v. Sonotone, 442 U.S. 330 (1979). Therefore, if the courts apply a Clayton Act measure of damages in civil RICO cases, an injury to “business or property” should be construed very broadly.

The Future of RICO

A critical piece of the puzzle comes from the recent Supreme Court decision in Yegiazaryan v. Smagin, 599 US 533 (2023). This case expanded the scope of civil RICO, holding that a context-specific inquiry should be used to determine whether harm qualifies as a domestic injury. In Yegiazaryan, the court found that because the majority of the alleged racketeering activities deployed by the defendant to obstruct the enforcement of a U.S. judgment happened in the U.S., there could be a RICO injury, even though the parties involved were foreign. By holding that foreign plaintiffs can pursue civil RICO claims, the court rejected the rigid “residency test” for domestic injury claims.

The court’s reasoning in Yegiazaryan suggests an openness to a broader, context-based interpretation of RICO injury. In that case, the injury was not tied to traditional business losses but rather to the obstruction of judgment enforcement—an abstract harm but one that had significant financial consequences. Horn’s case, though domestic in nature, similarly seeks to push the boundaries of RICO by arguing that economic losses tied to personal injury should fall within its scope.

Horn represents a key moment in the ongoing evolution of RICO law, the outcome of which will have far-reaching implications for the future of civil RICO litigation. The court’s willingness in Yegiazaryan to expand RICO’s application to foreign judgment enforcement hints at a broader view of what constitutes a compensable injury. If the court sides with the respondent, the decision could dramatically expand RICO’s scope, allowing plaintiffs to pursue claims for economic losses tied to personal injuries. On the other hand, if the court sides with the petitioners, it will reinforce the traditional boundaries of RICO, limiting civil RICO claims to direct business or property harm. Ultimately, the case tests the limits of RICO’s reach in civil matters and reflects broader tensions in American jurisprudence about how courts interpret the scope of statutes to address modern legal challenges. As with Yegiazaryan, the decision in Horn will shape how courts approach the definition of injury in the context of increasingly complex disputes.

Edward T. Kang is the managing member of Kang Haggerty. He devotes the majority of his practice to business litigation and other litigation involving business entities. Contact him at ekang@kanghaggerty.com.

Reprinted with permission from the November 7, 2024 edition of “The Legal Intelligencer” © 2024 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or reprints@alm.com.

Legal Intelligencer: From Mobsters to Fraudsters: Clearing the Bar for Civil RICO Claims

Edward T. Kang — Fri, 05 Jul 2024 20:54:50 +0000

Civil RICO is seen as “the litigation equivalent of a thermonuclear device,” and civil RICO claims are often employed in complex, high-stakes litigation.

In the July 5, 2024 Edition of The Legal Intelligencer, Edward T. Kang writes, “From Mobsters to Fraudsters: Clearing the Bar for Civil RICO Claims.“

When I hear practitioners talk about RICO, I often hear how no one understands it. I also hear some practitioners talk about how RICO is dead. It is not.

The Racketeer Influenced and Corrupt Organizations Act (RICO) was enacted by Congress and signed into law in 1970 as a tool to combat organized crime in the United States. In addition to imposing substantial criminal penalties for violations, the RICO statute authorizes a private right of civil action, enabling the victims of a person or business engaging in a “pattern of racketeering activity” to recover treble damages and attorney fees for injury to their business or property. Civil RICO is seen as “the litigation equivalent of a thermonuclear device,” Miranda v. Ponce Federal Bank, 948 F.2d 41 (1st Cir. 1991), and civil RICO claims are often employed in complex, high-stakes litigation.

The U.S. Supreme Court has consistently recognized the importance of the civil RICO claims. For example, the court has stated that the object of civil RICO is “not merely to compensate victims but to turn them into prosecutors, ‘private attorneys general,’ dedicated to eliminating racketeering activity.” See Rotella v. Wood, 528 U.S. 549 (2000). Data seems to suggest that it is useful and expedient for plaintiffs attorneys to effectively bring RICO claims like prosecutors. For example, plaintiffs brought an average of 759 civil RICO claims each year between 2001 and 2006. Of all RICO cases decided by federal appellate courts between 1999 and 2001, 78% were civil, and only 22% were criminal. As a result, judges and legal scholars have routinely complained that civil RICO’s overly expansive reach gives many ordinary civil cases an entrée to federal court.

To succeed on a civil RICO claim, a plaintiff must show that a defendant participated in the conduct of an enterprise that affects interstate commerce through a pattern of racketeering activity or collection of unlawful debt. See 18 U.S.C. Section 1962(c). In addition, the conduct must be the proximate cause of harm to the victim. See Sedima, S.P.R.L. v. Imrex, 473 U.S. 479 (1985). Of course, the RICO elements change drastically among different subsections (a), (b), and (c), where the “enterprise” could be either a “prize,” “victim,” or “instrument.” In other words, the single most litigated element of RICO—i.e., the “enterprise”—takes on different characteristics based on which subsubsection of the statute applies. As such, while these elements might appear simple at times, each has developed its own body of case law, with sub-elements, exceptions, and exceptions to the exceptions. Even if practitioners select the appropriate subsection, meeting the rest of the RICO elements is still challenging.

Many civil RICO claims are dismissed at the pleadings stage as the courts are hesitant to allow such claims to proceed. Only skilled and experienced attorneys can navigate the many requirements necessary to bring a successful civil RICO claim. Civil RICO claims are commonly dismissed either due to failure to plead fraud with particularity, or to the court finding that the claims are merely “garden-variety claims,” and thus do not support a finding of pattern of racketeering. This article discusses these two specific hurdles to civil RICO claims.

Failure to Plead With Particularity Under Rule 9(b)

Because typical civil RICO claims allege some type of fraud, one of the most common hurdles at the pleading stage is to plead the circumstances of the fraud with particularity under Federal Rules of Civil Rule 9(b). In general, while the plaintiff may generally plead the defendant’s state of mind or intent to deceive or defraud, appellate courts require a plaintiff to make particularized allegations regarding the facts of the fraud itself when pleading wire fraud or mail fraud as a predicate act. See Odom v. Microsoft, 486 F.3d 541 (9th Cir. 2007). Plaintiffs are required to identify specific examples of the fraud. For instance, in Burgess v. Religious Technology College, 600 Fed.Appx. 657 (11th Cir. 2015), the U.S. Court of Appeals for the Eleventh Circuit affirmed the dismissal of a civil RICO claim, finding that the plaintiffs failed to satisfy Rule 9(b) because they failed to identify the time period during which the defendants made the alleged fraudulent statements and the specific content of such statements.. The court noted that even under a relaxed standard with alleged prolonged multi-act schemes, a plaintiff must still allege at least some particular examples of fraudulent conduct to “lay a foundation for the rest of the allegations of fraud.” In addition, the plaintiffs must plead adequate factual allegations for courts to plausibly infer that the defendants specifically intended to defraud. For instance, in Eclectic Properties East v. Marcus Millichap, 751 F.3d 990 (9th Cir. 2014), the Ninth Circuit affirmed the dismissal of a civil RICO claim alleging the defendants’ intentional fraud in the inflation of property values on properties sold to the plaintiffs, finding that the plaintiffs’ fraud theory was not plausible when considered in light of the innocent, alternative explanation that the transactions were merely a group of business deals gone bad during a deep recession.

Failure to Plead a Pattern of Racketeering Activity

Courts also dismiss civil RICO claims of fraud when finding that the plaintiff only alleges a “garden-variety” fraud claim, not a pattern of racketeering activity. Some appellate courts have stated that when the RICO allegations concern only a single scheme with a discrete goal, the plaintiff fails to allege a pattern of racketeering even if the scheme took place over a longer period of time. For instance, in Home Orthopaedics v. Rodriguez, 781 F.3d 521 (1st Cir. 2015), the First Circuit dismissed a civil RICO claim, finding that despite the multiple instances of extortionate threats made over a period of years, the plaintiff failed to adequately allege a pattern of racketeering activity when the action evolved from a single business transaction that only harmed the plaintiff. In not finding a pattern of racketeering activity, the court stated that even if the defendants committed numerous crimes to try to collect a specific sum of money from the plaintiff, all of the unlawful acts had their origin in a single event or a single transaction. The court also found that the plaintiff failed to show that the defendants’ scheme to collect money would continue indefinitely, or that the defendants’ alleged racketeering acts were part of their regular business.

The Takeaways

Civil RICO claims often become the sole avenue for bringing large-scale fraud cases involving numerous victims to federal court. Trying to convert a “regular” fraud case into a RICO case is a mistake, however. Although RICO cases involve fraud, they also require other elements, including a pattern of fraud (not just one-time fraud) and the enterprise (not just one defendant). Practitioners need to understand each of the elements thoroughly. While it appears, there is an upward trend of expanding the scope and applicability of civil RICO cases, practitioners should be careful in making sure that their case meets the elements of a RICO before bringing one.

Reprinted with permission from the July 5, 2024 edition of “The Legal Intelligencer” © 2024 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or reprints@alm.com.

Legal Intelligencer: Civil RICO and Proximate Cause: A Tool for Defendants and Challenge for Plaintiffs

Edward T. Kang — Tue, 28 Jul 2020 17:18:34 +0000

A recent decision out of the U.S. District Court for the Eastern District of Michigan underscored the RICO “proximate cause” inquiry highlighting yet another, often overlooked, complexity in litigating such cases.

In the July 23, 2020 edition of The Legal Intelligencer Edward T. Kang, managing member of Kang Haggerty wrote “Civil RICO and Proximate Cause: A Tool for Defendants and Challenge for Plaintiffs.”

In March 2018, I authored a column on civil RICO claims brought under 18 U.S.C. Section 1962(a) and (b). In that space, I explained the complexity of those sections within RICO cases. A recent decision out of the U.S. District Court for the Eastern District of Michigan underscored the RICO “proximate cause” inquiry highlighting yet another, often overlooked, complexity in litigating such cases.