Insurer Fights Back Against No-Fault Clinic Mills
Fraud Doesn’t Pay When Insurers Fight Back
Post number 5353
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ISSUE:
Whether State Farm was entitled to a preliminary injunction staying pending no-fault arbitrations and collection actions, and barring new filings, while it litigated a federal RICO and fraud action alleging a large-scale no-fault insurance scheme.
In State Farm Mutual Automobile Insurance Company and State Farm Fire And Casaulty Company v. Atlantic Medical & Diagnostic, P.C., Jonathan Landow, M.D., and Viviane Etienne, M.D., No. 26-CV-1084 (OEM) (JAM), United States District Court, E.D. New York (April 29, 2026) Plaintiffs alleged that Landow and Etienne operate Atlantic as a high-volume medical practice at more than 90 multi-disciplinary clinics that cater to individuals purportedly injured in automobile accidents.
At these No-Fault Clinic Mills, Plaintiffs contend that Atlantic conducts examinations that are not legitimately performed to determine the true nature and extent of patient injuries but rather are performed as a pretext to justify unnecessary treatment and services.
Plaintiffs further alleged that Atlantic secures patients through improper quid pro quo arrangements with the NoFault Clinic Mills where it operates.
RULE:
A preliminary injunction requires irreparable harm, either likelihood of success on the merits or sufficiently serious questions going to the merits plus a balance of hardships tipping decidedly in the movant’s favor, and consistency with the public interest.
HOLDING:
Yes. The court granted State Farm’s motion and stayed all pending no-fault arbitrations and state-court collection proceedings, while also enjoining defendants from filing new ones during the federal case.
REASONING:
The court found irreparable harm because thousands of piecemeal proceedings would obscure the alleged fraud and risk preclusive rulings. State Farm also raised serious questions on the merits through detailed allegations and documentary support showing predetermined treatment, medically unnecessary services, and kickback-based referrals. The balance of hardships and public interest favored an injunction, and the court declined to require a bond.
According to the complaint, defendants allegedly:
1. Conducted examinations as a pretext to justify unnecessary treatment;
2. Referred patients and prescribed goods/services pursuant to kickback arrangements disguised as rent or service fees;
3. Submitted claims falsely representing that treatment was medically necessary and reimbursable; and
4. Filed thousands of no-fault arbitrations and state court collection actions when claims were denied.
State Farm claimed more than 7,000 collection proceedings had been filed and sought over $30 million in damages. It moved for a preliminary injunction to stay all pending no-fault arbitrations/lawsuits and bar defendants from filing new ones while the federal action proceeds.
LEGAL ISSUES
The court applied the Second Circuit standard for a preliminary injunction. To obtain one, the movant must show:
1. Irreparable harm;
2. Either likelihood of success on the merits or serious questions going to the merits plus a balance of hardships tipping decidedly in the movant’s favor; and
3. That the injunction is in the public interest.
Precedent recognized that, in large-scale no-fault fraud schemes, piecemeal arbitrations and collection actions can obscure the alleged fraud and create a risk of inconsistent or preclusive rulings, thereby supporting irreparable harm and injunctive relief.
The court also noted that under Rule 65(c) it had discretion to require no bond, or no bond at all, where there was no demonstrated likelihood of harm from an erroneous injunction.
BOTTOM LINE
The court held that recent Second Circuit authority strongly supports injunctive relief in large-scale no-fault RICO fraud cases where fragmented arbitrations and lawsuits would obscure the alleged scheme and risk inconsistent or preclusive rulings.
The services rendered by Atlantic, as alleged by Plaintiffs, result in a predetermined course of treatment for virtually every patient, regardless of their individual needs, conditions, or diagnoses.
LEGAL STANDARD
“[A] preliminary injunction is ‘an extraordinary remedy never awarded as of right.’” Benisek v. Lamone, 585 U.S. 155, 158 (2018) (quoting Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 24 (2008)).
DISCUSSION
For the foregoing reasons, Plaintiffs’ Motion for a preliminary injunction was granted.
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Foolish to Repeatedly Disobey Court Orders
All That Remains For Trial Is Plaintiff’s Damages On Each Of These Claims And Establishing Proximate Causation Of Those Damages.
Post number 5348
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In Linh Wang v. Esurance Insurance Company, No. C24-0447-JCC, United States District Court, W.D. Washington, Seattle (May 1, 2026) John C. Coughenour, United States District Judge, found that throughout this case, culminating with its briefing on Plaintiff’s renewed motion and that Defendant has subjected Plaintiff to unnecessary motion practice for clearly discoverable information and made dubious representations (including to the Court).
FACTUAL BACKGROUND
This case involves an underinsured/uninsured motorist insurance bad faith claim arising from a 2017 motor vehicle collision. The plaintiff, Linh Wang, alleges that Esurance Insurance ...
The Right to Negotiate with Insurer is Not an Assignment of Claims
Post number 5347
Read the full article at https://www.linkedin.com/pulse/ambiguous-contract-repair-assignment-barry-zalma-esq-cfe-2xppc, see the full video at https://rumble.com/v79is1s-ambiguous-contract-to-repair-not-an-assignment.html and at and at https://zalma.com/blog plus more than 5300 posts.
Nebraska Requires an Actual Assignment to Allow Contractor to Sue Insurer
In Millard Gutter Company, a corporation doing business as Millard Roofing and Gutter v. Farmers Mutual Insurance Company of Nebraska, also known as Farmers Mutual Insurance, also known as Farmers Mutual, No. A-24-818, Court of Appeals of Nebraska (May 5, 2026) Millard sued Farmers as an assignee of Jane Anzalone who had hired Millard Gutter to repair the roof of her home and agreed to allow Millard Gutter to coordinate with her insurer, Farmers Mutual, concerning reimbursement for repairs authorized under her insurance policy.
FACTUAL BACKGROUND
In ...
Attempt to Withdraw Plea After Sentencing Fails
Post number 5346
Read the full article at https://www.linkedin.com/pulse/admit-crime-ready-do-time-barry-zalma-esq-cfe-hgyce, see the video at and at and at https://zalma.com/blog plus more than 5300 posts.
Stealing from Insurers and Employer Gets Defendant Five Years in Prison
In State of Wisconsin v. Jacquelyn R. Harris, No. 2025AP489-CR, Court of Appeals of Wisconsin (April 22, 2026) Harris pled no contest and was found guilty. She was sentenced to five years of initial confinement and three years of extended supervision, with restitution ordered in the amounts of $31,086 to Kaliber and $25,000 to Erie Insurance Company.
FACTUAL BACKGROUND
In late 2022, Jacquelyn R. Harris was charged with theft in a business setting under WIS. STAT. § 943.20(1)(b) (2023-24). Harris, while employed as the office manager for Kaliber Collision Repair in Port ...
To Defeat a Privilege or Protection from Discovery Evidence is Required
Post number 5353
To Defeat a Privilege or Protection from Discovery Evidence is Required
Not Enough Evidence to Allow Application of the Peer Review Privilege
In Chelsey Holland, Individually And As Mother, Natural Guardian, And Next Friend Of A.T., A Minor v. Dayton Children’s Hospital, C. A. No. 30516, 2026-Ohio-1678.
FACTS
Chelsey Holland sued Dayton Children’s Hospital for medical negligence and breach of fiduciary duty arising from injuries allegedly caused when hospital staff attempted to insert a nasogastric feeding tube into her infant daughter, A.T., in January 2015.
Dayton Children’s withheld the emails on claims of peer-review privilege and work-product protection.
LEGAL ISSUES - PEER-REVIEW PRIVILEGE
Under R.C. 2305.252(A) protects proceedings and records within the scope of a peer review committee of a healthcare entity. To invoke the privilege, the resisting party must show: 1. the existence of a qualifying peer review ...
To Defeat a Privilege or Protection from Discovery Evidence is Required
Post number 5353
To Defeat a Privilege or Protection from Discovery Evidence is Required
Not Enough Evidence to Allow Application of the Peer Review Privilege
In Chelsey Holland, Individually And As Mother, Natural Guardian, And Next Friend Of A.T., A Minor v. Dayton Children’s Hospital, C. A. No. 30516, 2026-Ohio-1678.
FACTS
Chelsey Holland sued Dayton Children’s Hospital for medical negligence and breach of fiduciary duty arising from injuries allegedly caused when hospital staff attempted to insert a nasogastric feeding tube into her infant daughter, A.T., in January 2015.
Dayton Children’s withheld the emails on claims of peer-review privilege and work-product protection.
LEGAL ISSUES - PEER-REVIEW PRIVILEGE
Under R.C. 2305.252(A) protects proceedings and records within the scope of a peer review committee of a healthcare entity. To invoke the privilege, the resisting party must show: 1. the existence of a qualifying peer review ...
ZIFL – Volume 30, Issue 10 – May 15, 2026
THE SOURCE FOR THE INSURANCE FRAUD PROFESSIONAL
Post number 5352
Read the full article at https://www.linkedin.com/pulse/zalmas-insurance-fraud-letter-may-15-2026-barry-zalma-esq-cfe-iulwc and at https://zalma.com/blog plus more than 5300 posts.
Zalma’s Insurance Fraud Letter (ZIFL) continues its 30th year of publication dedicated to those involved in reducing the effect of insurance fraud. ZIFL is published 24 times a year by ClaimSchool and is written by Barry Zalma. It is provided FREE to anyone who visits the site at http://zalma.com/zalmas-insurance-fraud-letter-2/ This issue contains the following articles about insurance fraud:
Crime Doesn’t Pay
FELONIOUS PUBLIC ADJUSTER SUED FOR FEES ALLEGEDLY EARNED AS PART OF HIS CRIMINAL CONDUCT
Criminal May NotSue in Name of Corporation
In Andrew J Mitchell v. Pandit Law Firm, LLC, Civil Action No. 3:26-cv-00095, United States District Court, S.D. Texas, Galveston Division (April 30, 2026) the magistrate judge issued, on his own motion, a sua sponte memorandum and ...
