Uber Technologies Inc. cleared an important early hurdle in a federal lawsuit accusing California personal-injury lawyers and medical providers of participating in a scheme to inflate injury claims, extending the ride-hailing company’s broader effort to use federal racketeering law against alleged insurance fraud.
U.S. District Judge Sherilyn Peace Garnett allowed most of Uber’s claims under the Racketeer Influenced and Corrupt Organizations Act, or RICO, to proceed while dismissing one conspiracy count, according to Reuters. The ruling was made public Thursday, Reuters reported.
The decision keeps alive a case that could test how aggressively large companies can deploy a statute historically associated with organized crime against networks of attorneys and medical professionals accused of coordinating fraudulent civil claims.
According to Reuters, Uber alleges that personal-injury lawyers steered clients toward medical providers who performed treatment that was unnecessary or unrelated to their injuries. The company contends the arrangements were part of a kickback operation intended to increase the value of injury claims.
Two law firms named as defendants — Downtown LA Law Group and the Law Offices of Jacob Emrani — sought protection under the Noerr-Pennington doctrine, which generally shields efforts to petition the government from certain forms of liability. Garnett concluded that the doctrine does not insulate sham litigation, Reuters reported. The firms have denied wrongdoing.
At this stage of the proceedings, Uber sufficiently alleged that the firms made misleading representations involving clients’ injuries, medical care and lien arrangements, according to Reuters’ account of Garnett’s ruling. The decision does not determine whether Uber’s allegations are true; it allows the surviving claims to move deeper into litigation.
The outcome wasn’t an across-the-board victory for Uber. Garnett dismissed a RICO conspiracy claim involving all defendants, though she gave the company an opportunity to try to revive it. She also ordered Uber to pay legal fees to three defendants, including the Emrani firm and a California surgeon, after concluding that the company abandoned some claims rather than defend them against arguments involving a California law designed to prevent litigation from being used to suppress protected activity, Reuters reported.
The California dispute is part of a wider litigation campaign. Uber and other large companies have filed at least 20 civil RICO cases against plaintiffs’ attorneys in federal courts during the past two years, according to Reuters. Uber has pursued similar litigation involving law firms in Miami, New York and Philadelphia. Successful civil RICO plaintiffs can potentially recover three times their proven damages.
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Results so far have been uneven.
In Philadelphia, a federal judge in May allowed claims brought by Uber and FedEx Corp. against a personal-injury lawyer and his firm to continue. The companies accused them of directing clients to medical providers as part of an alleged effort to exaggerate injuries and produce false medical records, according to Reuters. The lawyer and firm denied wrongdoing.
Uber suffered a setback in New York this month when a federal judge dismissed a similar lawsuit against three law firms. The court found that Uber had not adequately alleged that the firms improperly benefited from their relationships with doctors beyond ordinary arrangements such as referrals, fee sharing and medical testimony, Reuters reported.
The contrasting rulings illustrate the legal challenge confronting Uber as it seeks to characterize alleged personal-injury fraud as coordinated racketeering. RICO can offer substantial financial leverage because of its treble-damages provision, but plaintiffs still must satisfy detailed requirements connecting defendants to an alleged racketeering enterprise.
Representatives for Uber did not immediately respond to Reuters’ request for comment on the California ruling. Lawyers for Downtown LA Law Group and the Emrani firm also did not immediately respond, according to Reuters.
The case is Uber Technologies Inc. v. Downtown LA Law Group LLP et al., U.S. District Court for the Central District of California, No. 2:25-cv-00612.
Source: Reuters
