Antitrust Law Daily Wrap Up, RICO NEWS: Companies seek High Court review of alleged scheme to defraud Allstate, (Feb 2, 2016)

By Greg Hammond, J.D.

A group of telemarketing companies, chiropractic clinics, and affiliated law offices are challenging a decision by the U.S. Court of Appeals in New Orleans, which concluded that sufficient evidence existed to support a jury’s finding that the petitioners violated the federal Racketeer Influenced and Corrupt Organizations Act (RICO) and Ohio’s RICO statute, committed fraud, and were unjustly enriched. The petitioners engaged in a scheme to defraud insurance companies, including Allstate Insurance Co., by contacting not-at-fault victims in vehicle accidents and convincing them to receive unnecessary chiropractic services, the appellate court found (Plambeck v. Allstate Insurance Co., Dkt. 15-949).

The petition for review asks: When, if ever, can the plaintiff in a civil RICO case predicated on mail and wire fraud establish proximate causation without showing that someone—the plaintiff or a third party—relied on the defendants’ misrepresentations to the plaintiff’s detriment?

Advertising, due process. Consumers are petitioning the U.S. Supreme Court to review an Illinois Supreme Court decision that vacated a $10.1 billion verdict against tobacco company Philip Morris Inc. for purportedly violating Illinois law by deceptively marketing its “light” and “low tar” cigarettes. The Illinois Supreme Court determined that the appellate court could not decide the merits of the case because the plaintiff consumers incorrectly filed a petition for relief from judgment in an Illinois circuit court when they should have filed the petition in the state supreme court (Price v. Philip Morris, Inc., Dkt. 15-947).

The petition asks: Whether it violates the Due Process Clause of the Fourteenth Amendment for a judge to participate in a case where the judge has made pejorative public statements about a litigant or an attorney, and there exists a reasonable public perception that one of the parties funded the judge’s election campaign?

Franchising, discrimination. The International Franchise Association, Inc. (IFA) is asking the High Court to review a decision by the U.S. Court of Appeals in San Francisco that found IFA was not likely to succeed on the merits of its challenge to Seattle’s $15 an hour minimum wage ordinance—or more specifically, to the municipality’s decision to group franchisees in with the category of “large employers” that will be subjected to the steeper schedule of incremental wage hikes over the next five years. The appellate court affirmed a district court decision denying preliminary injunctive relief to the $15 an hour minimum wage ordinance (International Franchise Association, Inc. v. Seattle, Dkt. 15-958).

The question presented is: Whether a state or local law that discriminates against certain in-state businesses based solely on their ties to interstate commerce discriminates against interstate commerce?

Attorneys: Peter Michael Jung (Strasburger & Price, LLP) for Michael Kent Plambeck, D.C. Stephen M. tiller (Korein Tillery LLC) and David C. Frederick (Kellogg, Huber, Hansen, Todd, Evans & Figel, PLLC) for Sharon Price and Michael Fruth. Paul D. Clement (Bancroft PLLC) for International Franchise Association, Inc.

Companies: Allstate Insurance Co.; Philip Morris, Inc.; International Franchise Association, Inc.

News: Advertising FranchisingDistribution RICO