Antitrust Law Daily Wrap Up, RICO—W.D. Tex.: State Farm RICO claim against Texas Physician may go to trial on treatment patterns, (Jun 25, 2025)

By Justin Marcus Smith, J.D.

At summary judgment, the defendant physician and his practice only managed to prevail with respect to fabricated services or patients, and questions otherwise remained about individualized reviews.

In a case involving alleged auto insurance fraud, a Texas physician satisfied his summary judgment burden on one aspect of State Farm’s Racketeer Influenced and Corrupt Organizations Act (RICO) claim against him, i.e., whether he fabricated treatment of patients, so held the federal district court in San Antonio, Texas. The court otherwise found medical billing patterns precluded summary judgment for the physician to the extent State Farm premised its RICO claim on the alleged illegitimacy or unnecessary nature of disputed treatments. In reaching these decisions, the court said it disregarded State Farm’s after-the-fact expert opinion, especially as to the physician’s state of mind, as well as State Farm’s “interpretive gloss” on the proffered evidence. Credibility determinations about medical billing patterns were for the trier of fact. The court accordingly declined to weigh or determine the credibility of witnesses or documents in the context of summary judgment. The court also denied the physician summary judgment on the State Farm Texas money had and received claim (State Farm Mutual Automobile Insurance Co. v. Misra, No. 5:22-cv-00806-JKP (W.D. Tex. Jun. 23, 2025)).

Background. Plaintiffs State Farm and State Farm County Mutual Insurance Company of Texas (collectively, State Farm) complained that Sanjay Misra, M.D., a San Antonio physician, recommended and administered medically unnecessary procedures to inflate medical bills and to increase the value of his patients’ bodily injury or uninsured/underinsured claims. The procedures included epidural steroid injections (ESIs) and spinal surgeries sometimes provided to auto accident victims. State Farm sued Misra and his professional association practice, Misra P.A. (collectively, Misra).

In 2023, the court denied Misra’s motion to dismiss. The court found State Farm had standing and sufficiently pleaded that Misra and his practice constituted a RICO entity on allegations of mail fraud, fraudulent intent, and proximate causation of State Farm’s injuries. The court found State Farm pleaded that Misra was distinct from Misra P.A. and used Mira P.A. for unlawful purposes. The State Farm allegations also sufficed for a Texas law claim for money had and received. Most recently, the court partly granted Misra’s motion for summary judgment.

Disputing facts. The court took issue with State Farm’s response to Misra’s statement of undisputed facts. The State Farm response created “unnecessary uncertainty” by starting with its own statement of facts. The State Farm statement of facts was not a paragraph-by-paragraph recitation of undisputed facts with supporting evidence, and it did not address Misra’s statement of facts until a footnote on page fifteen. The court said the better practice was to “directly contest or concede asserted uncontested facts on a paragraph-by-paragraph basis” and submit an opposing statement of undisputed facts. The court cited that this was “not the first time State Farm attorneys have had issues with summary judgment briefing.”

The court also took issue that State Farm did not make a proper Fed. R. Civ. P. 56(c)(2) objection to some of Misra’s evidence or cites to the complaint and other materials in the record. State Farm did not make any attempt to address whether Misra could not produce admissible evidence to support his statement undisputed facts. State Farm merely complained that the materials Misra cited were inadmissible in current form. The court said the focus of the rule is on whether evidence could be proffered in an admissible form, not that it has been.

The court held State Farm did not assert a viable objection to some of Misra’s assertions. Misra also sought to strike certain evidence from the record as incompetent on summary judgment, but even though State Farm needed more with respect to RICO, the court declined to exclude a State Farm expert’s declaration and expert report. The magistrate had denied a prior motion to exclude, but then again, the court qualified that it shared the magistrate’s concern that a portion of the expert’s testimony was improper state of mind opinion. The court said it would not allow opinions about Misra’s state of mind to be presented as a matter of fact.

Turning to other Misra evidentiary objections, summaries could not be excluded simply because they might be inaccurate, and the court overruled or deemed other objections moot. The court also noted here that Misra did not dispute numerous other facts State Farm proffered.

Primary allegations. As alleged by plaintiffs, and agreed to by defendants, Misra’s physical exams reflected patients exhibiting tenderness or pain with soft tissue palpitations, motor strength deficits, and decreased or diminished sensation in the affected area. Misra memorialized the exams in typewritten reports. Medical practitioners commonly accept assignment of a patient’s right to payments from insurers under letters of protection. That is an accepted practice. State Farm settled within policy limits nearly all settlements they now retroactively disputed. State Farm’s claims centered on the allegation that Misra recommended and administered medically unnecessary epidural steroid injections.

Partial judgment. Misra satisfied his summary judgment burden on one aspect of the RICO claim, whether Misra fabricated treatment of patients. However, the court otherwise found a genuine dispute of material fact precluded summary judgment for Misra on the RICO claim premised on the alleged illegitimacy or unnecessary nature of the disputed treatments.

Misra urged the court to grant summary judgment on the RICO claim on two independent and alternative bases: (1) State Farm could not prove the predicate act of mail fraud because there was competent evidence of a pattern of racketeering by mail fraud where there was no evidence of fraud, false representation, or specific intent; and (2) State Farm could not show causality between the alleged wrongdoing and purported injury.

The court found Misra accurately argued that billing mail fraud was the only predicate RICO act. State Farm’s response “miss[ed] the point” and did not identify any evidence to support fraud based on unperformed services. Moreover, at least in the Fifth Circuit, a reasonable difference of opinion among physicians reviewing medical documentation after the fact was not enough to show that Misra’s judgments or any claims based on them were false.

Having found that Misra carried his summary judgment burden State Farm’s theory of fabricated services rendered, the court determined State Farm did not provide evidence to create a genuine dispute of material fact on its theory of fabricated services rendered. State Farm did show a genuine dispute about Mira’s medical records, but the court found State Farm took “interpretive liberty with some evidence.” For example, certain emails from referring attorneys did not clearly dictate the number and specific type of injections the referred patients were to receive. The court said it could not infer anything from them. State Farm citations to a range of evidentiary exhibits also made it difficult to trace the precise evidentiary basis for a given fact. The medical records themselves did not reflect State Farm contentions or even subpar examinations. In the absence of evidence about a violation of statute or regulation, medical providers generally have discretion as to what is medically necessary. Patients essentially stated that their treatments had little or no beneficial effect.

The court otherwise found patterns in the records provided enough circumstantial evidence, on their own, to present a genuine dispute of material fact whether Mira failed to conduct individualized reviews. Accordingly, the court could not find that Misra was entitled to judgment as a matter of law on the RICO claim as premised on illegitimate or unnecessary treatment. Evaluating the billing patterns and the credibility of witnesses about Misra’s state-of-mind was better left to trial.

Causality. The court said it had concerns about causality, but it concluded the evidence could support a verdict for either side. The court declined to narrow the number of claims because that would have been an extraordinary effort in light of the 335 patients at issue.

Texas claim. The court denied Misra’s motion for summary judgment on State Farm’s money had and received claim under Texas law. On the facts, the court predicted the highest Texas court would apply a two-year statute of limitations, but this did not end the inquiry because the court found Misra did not carry his burden on the limitations period. There was a genuine dispute of material fact as to when the claim accrued in light of the discovery rule. Misra argued that State Farm judicially admitted to knowing about the alleged fraudulent conduct by April 2019, but the court found the supposed admission too ambiguous to decide when the State Farm claim accrued. Misra’s voluntary payment defense likewise suffered from the same ambiguity.

The Case is No. 5:22-cv-00806-JKP.

Judge: Pulliam, J.

Attorneys: Christopher Brian Maciel (Katten Muchin Rosenman LLP) for State Farm Mutual Automobile Insurance Co. Joseph Lawrence Korbel (Davis, Cedillo, & Mendoza, Inc.) for Sanjay Misra.

Companies: State Farm Mutual Automobile Insurance Co.

Cases: RICO TexasNews