Antitrust Law Daily Wrap Up, RICO—D. Or.: Allstate to pay attorney fees for defense of failed RICO claims, (Jun 18, 2014)

By Greg Hammond, J.D.

Two individual doctors at Accident Care Specialists of Portland, Inc. were granted attorney fees as the prevailing defendants in an Oregon RICO action. In reaching its decision to grant attorney fees under Oregon RICO, but not under the Oregon Unfair Trade Practices Act (UTPA), the federal district court in Portland, Oregon determined that Allstate Insurance Company had an objectively reasonable basis for bringing its action under the UTPA (Accident Care Specialists of Portland, Inc. v Allstate Fire and Casualty Insurance Company, June 16, 2014, Mosman, M).

UTPA fees. Under the UTPA, a court has discretion to award attorney fees to a prevailing party, if the non-prevailing party lacked any objectively reasonable basis in bringing its claim. The court determined that Allstate had a reasonable basis for bringing its UTPA counterclaims, because (1) there was a non-frivolous argument for tolling the statute of limitations period under the state’s discovery rule and (2) it was not objectively unreasonable for Allstate to seek to extend the protections of the UTPA to the transactions in this case. Consequently, neither of the two individual doctors were granted attorney fees for the UTPA counterclaim.

Oregon RICO fees. The court, however, had discretion to award attorney fees to Dr. Lee and Dr. Cluen with regard to Allstate’s Oregon RICO counterclaim, as Lee and Cluen were the prevailing parties with regard to this claim. Specifically, the court determined that attorney fees would be appropriate in this case because they would present only a slight danger of undue deterrence of meritorious Oregon RICO claims premised on criminal activity, but could also potentially deter Oregon RICO claims that lack a legal foundation. Consequently, the court granted $112,339 in attorney fees and $3,435.24 in costs and expenses to Dr. Lee, and $90,512.50 in attorney fees and $3,969.32 in costs and expenses to Dr. Cluen.

Accident Care entitlement to attorney fees. Accident Care also filed a motion for attorney fees, seeking a total of over $300,000 for all hours worked by counsel and staff between 2011 and 2014. However, Accident Care provided no justification for its entitlement to attorney fees incurred prior to the counterclaims at issue, which were filed in 2013. Because it was impossible to determine which hours were spent on defending against Allstate’s counterclaims and which hours were spent on Accident Care’s own claims, the court denied Accident Care’s motion for attorney fees.

The case numbers are 3:11-cv-01033-MO and 3:13-cv-00408-MO.

Attorneys: Robert Le (Robert Le, LLC) for Accident Care Specialists of Portland, Inc. Midori R. Sagara (Cole Wathen Leid and Hall, PC) for Allstate Fire and Casualty Ins. Co.

Companies: Accident Care Specialists of Portland, Inc.; Allstate Fire and Casualty Ins. Co.

Cases: RICO StateUnfairTradePractices OregonNews