Manning Kass represented our client, a transit insurance company, in connection with a RICO action filed against a defendant pharmacy and its owner. The lawsuit alleges the defendants entered into illegal kickback agreements with No-Fault clinics and laypersons to dispense exorbitant, unnecessary topical pain medications to exploit New York’s No-Fault reimbursement system. The complaint seeks a declaratory judgment that our client is not required to reimburse any unpaid claims.
Seeking to avoid the risk of inconsistent decisions, awards and judgments in the lower state courts and in arbitrations with respect to approximately 260 No-Fault matters filed by the defendant pharmacy to recover No-Fault benefits for the very services that our client’s claims are fraudulent and are the subject of its lawsuit, our client filed a motion for a preliminary injunction to stay those pending matters. The Court granted the motion, finding our client faced irreparable harm from imminent risks of conflicting judgments, unrecoverable costs, and potential preclusive effects from parallel proceedings.
The ruling allows the federal litigation to proceed without the risks of inconsistent rulings in the state court and arbitration proceedings, while also ensuring that our client will not be required to pay claims that it alleges are fraudulent while its claims in federal courts are pending. If our client ultimately prevails on its declaratory judgment claim, it will not be required to reimburse the pharmacy for any unpaid claims.
About Our Team
New York office Managing Partner Robert Stern, Partners James McKenney and Lee Pinzow, and Associates Erica Mobley, Spencer Gilbert and Aaditya Kaushik are members of the Special Investigation Unit / Insurance Fraud Litigation team at Manning Kass. These dedicated individuals have years of combined experience in assisting and advising insurers in detecting, deterring, preventing, and prosecuting insurance fraud.