Staff Reports
A new report from the American Tort Reform Association says businesses are fighting back against what they call organized litigation fraud by using the civil RICO law. The paper catalogs a surge of RICO suits — nearly 300 since 2024 — and points to a federal judge in Pennsylvania who recently let one of those complaints survive a motion to dismiss. If you care about insurance rates, court dockets, or plain common sense, this is worth watching.
ATRA report: Businesses turn to civil RICO to fight litigation fraud
The ATRA report lays out a clear trend: companies and insurers are filing civil RICO claims against alleged fraud rings that include law firms, medical clinics, litigation funders and lead generators. The group counted dozens of attorney-involved RICO suits and roughly 300 civil RICO cases across the country since 2024. The patterns are familiar — staged accidents, bulk doctor visits, inflated billing, and coached testimony in asbestos claims — all aimed at producing payouts for plaintiffs and fees for the players who feed them.
Why the Pennsylvania decision matters for RICO strategy
What turned heads was a federal judge in the Eastern District of Pennsylvania who denied a motion to dismiss in the Uber/FedEx RICO case against a Philadelphia personal-injury firm and associated providers. U.S. District Judge Mark A. Kearney ruled the complaint plausibly alleged an enterprise and predicate acts like mail and wire fraud. That matters because civil RICO claims face a high bar — fraud must be pleaded with particularity — and many such suits fail early. This ruling shows that, when companies bring a well-drafted case, courts may let discovery expose the truth instead of tossing it out on a technicality.
What courts and consumers should expect next
Costs, delays, and the need for real fixes
Make no mistake: RICO is a heavy tool. It can be used to dismantle a fraud ring, or it can be waved around to punish rivals. The smart play is to use it where there is clear, organized wrongdoing. If courts back careful RICO claims, discovery can reveal paper trails and referral schemes that otherwise hide in plain sight. That could thin the swamp of frivolous filings that clog dockets and drive up what ATRA calls the “tort tax” — higher premiums and slower justice for real victims. Lawmakers should push transparency for litigation funding, tighten penalties for perjury, and target the referral networks that turn medicine and paperwork into profit centers for shakedowns.
Bottom line: Clean up the courthouse or keep paying the price
Republicans who talk about small government and lower costs should like this: businesses are not waiting for bailouts from bureaucracy. They are using the law to push back against organized lawsuit abuse. Judges and legislators must now do their part — welcome legitimate RICO claims to discovery when pled properly, but guard against weaponizing the statute. Either we stand up to the gravy train that feeds off our legal system, or taxpayers, homeowners and drivers keep writing the checks. My money is on cleaning house.
