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From Antitrust Law Daily, March 2, 2017

Patient’s payment for unnecessary procedure was recoverable economic injury under RICO

By Linda O’Brien, J.D., LL.M.

A patient that sought damages for the amounts she paid for an allegedly unnecessary heart procedure were injuries to "business or property" to pursue RICO claims against the physician who perform the heart procedure and several hospitals, the U.S. Court of Appeals in Atlanta has ruled. Additionally, the Class Action Fairness Act’s local-controversy did not preclude the district court from exercising federal question jurisdiction. Thus, the district court’s dismissal of the complaint was vacated and the denial of the plaintiff’s motion to remand was affirmed (Blevins v. Aksut, March 1, 2017, Hall, J.).

After an examination, Dr. Seydi Aksut advised patients, including Elizabeth Blevins, that they needed heart surgery and that the procedure would be performed at one of the following locations: Selma Heart Institute, LifePoint Hospitals, Baptist Medical Center South, or Jackson Hospital & Clinic. In February 2015, Blevins filed suit against Aksut and the hospitals, alleging that the heart procedure was unnecessary and the defendants operated a racketeering enterprise through which they performed and billed for unnecessary heart procedures in violation of RICO.

The defendants moved to dismiss the complaint, arguing that the plaintiff alleged only personal injuries, which were not recoverable under RICO. The plaintiff moved to remand the case. A magistrate judge reported and recommended that the defendants’ motion to dismiss should be granted and that the motion for remand should be denied. The district court adopted the opinion, granted the motion to dismiss, and denied the motion to remand. The plaintiff appealed.

RICO. The appellate court determined that the plaintiff alleged economic injuries that were recoverable under RICO. Blevins alleged that the defendants operated a medical services enterprise that falsely represented to patients that certain interventional cardiac procedures were medically necessary. She also alleged that the defendants committed mail and wire fraud through the enterprise by billing patients for the unnecessary procedures. Her alleged harm was the obligation and payment to the defendants for the unnecessary medical procedure.

In the context of unnecessary medical treatment, the payment for such treatment may constitute an injury to property. The plaintiff seeks to recover damages for the amounts she paid for the unnecessary heart procedure and that injury did not flow from any personal injury. Because the plaintiff alleged injuries to "business or property," the district court grant of the defendants’ motion to dismiss must be vacated, the court found.

CAFA. The local-controversy provision of the Class Action Fairness Act (CAFA) did not preclude the district court from exercising federal question jurisdiction. The language of the CAFA does not preclude the exercise of any other jurisdictional power, the court explained. When the requirements of federal question jurisdiction are met, the district courts may exercise jurisdiction over class actions, even if they involve only local parties. Thus, the district court did not err in denying the plaintiff’s motion to remand, the court concluded.

The case is No. 16-11585.

Attorneys: Greg William Foster (Foster Law Firm, PC) for Elizabeth Blevins. Allen C. King (Starnes Davis Florie, LLP) for Seydi Vakkas Aksut.

Companies: Selma Heart Institute, PC; Vaughan Region Medical Center, LLC; LifePoint Hospitals, Inc.; LifePoint RC, Inc.; LifePoint CSGP, LLC; Baptist Medical Center South; Jackson Hospital & Clinic, Inc.

MainStory: TopStory RICO AlabamaNews FloridaNews GeorgiaNews

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