United States District Court, S.D. Texas, Houston Division
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY and STATE FARM COUNTY MUTUAL INSURANCE COMPANY OF TEXAS, Plaintiffs,
NOORUDDIN S. PUNJWANI, M.D., PAIN ALLEVIATION & INTERVENTIONAL NEEDS, PLLC, BARKETALI M. ROOPANI, ANIL B. ROOPANI, and SOHAIL B. ROOPANI, Defendants.
MEMORANDUM AND ORDER
WERLEIN, JR. UNITED STATES DISTRICT JUDGE.
is Defendant Nooruddin S. Punjwani's Motion to Dismiss
(Document No. 14) and Defendants Pain Alleviation &
Interventional Needs, PLLC, Barketali M. Roopani, Anil B.
Roopani, and Sohail B. Roopani's Motion to Dismiss
(Document No. 15). After carefully considering the motions,
response, replies, and applicable law, the Court concludes
for the reasons that follow that both motions should be
State Farm Mutual Automobile Insurance Company and State Farm
County Mutual Insurance Company of Texas (collectively
"State Farm") allege that Defendants Nooruddin S.
Punjwani, M.D. ("Dr. Punjwani") and Pain
Alleviation & Interventional Needs, PLLC
("PAIN") engaged in a fraudulent scheme involving
medically unnecessary treatment of motor accident victims.
State Farm alleges it paid hundreds of allegedly fraudulent
claims for medical services, including unnecessary medical
evaluations, spinal injections, and related procedures,
performed at PAIN locations by Dr. Punjwani on accident
victims who submitted claims for insurance benefits under
State Farm policies. PAIN was formed as a Texas limited
liability company in July 2015, and its sole members from
formation through about June 2018 were Defendants Barketali
Roopani and his sons, Anil B. Roopani and Sohail B. Roopani
(collectively, "the Roopanis"). Dr. Punjwani has
performed evaluations and injections at PAIN since its
formation, and he is paid a fixed fee for every evaluation
and injection he performs.
to State Farm, Dr. Punjwani and PAIN prepared fraudulent
examination reports, MRI interpretive reports, and operative
reports that purported to show that accident victims suffered
serious injuries requiring the need for invasive
treatment. Dr. Punjwani allegedly performed the same
cursory examination on each accident victim and prescribed an
allegedly medically unnecessary series of three interlaminar
epidural steroid injections ("ESIs") for virtually
all patients with neck and/or back pain. State Farm
alleges that the serial ESIs were performed to inflate the
potential value of the accident victims' insurance
claims. Dr. Punjwani billed for fluoroscopic
guidance along with the ESIs, allegedly inflating the cost of
the procedures, but there are no records or films of actual
fluoroscopies, which is contrary to basic medical
of the diagnostic process, Dr. Punjwani interpreted MRI films
and allegedly made an identical positive spinal injury
diagnosis for each of the hundreds of accident
victims. He then used these findings as
justification for the medically unnecessary invasive
ESIs. State Farm alleges that the boilerplate
operative reports for the ESIs show that Dr. Punjwani made
the same predetermined, non-specific diagnosis of each
patient who received ESIs.
Farm alleges that at least as early as August 2015, Dr.
Punjwani and PAIN began to enrich themselves through the
victims' insurance claims made to State
Farm. Dr. Punjwani and PAIN created the bills
for the allegedly unnecessary services and sent them to
personal injury attorneys who then included the bills in
demand packages for claims. This scheme involved both (i)
bodily injury claims made by accident victims who were not
substantially at fault to the insurance companies of the
at-fault drivers and (ii) underinsured/uninsured motorist
claims made by accident victims to their own insurance
companies if they were unable fully to recover from the
at-fault drivers' insurance companies. State Farm
alleges that Dr. Punjwani and PAIN's scheme was designed
to induce State Farm to rely on the fraudulent bills and
reports from Dr. Punjwani and PAIN to settle the bodily
injury and underinsured/uninsured motorist claims with higher
than warranted settlement offers. The scheme was employed
with knowledge that Texas insurance law subjects insurers to
substantial liability for failing to accept reasonable
settlement demands within policy limits on bodily injury
claims or for not acting in good faith to provide a
settlement when liability is reasonably clear. As a result
of the scheme, State Farm seeks damages of more than $3
million from Defendants for settlements of bodily injury
claims and underinsured/uninsured motorist claims paid as a
result of fraudulent treatments of the claimants by Dr.
Punjwani and PAIN.
Farm alleges against Dr. Punjwani a claim under the Racketeer
Influenced and Corrupt Organizations Act ("RICO"),
18 U.S.C. § 1961 et. seq., and alleges against
all Defendants a claim for money had and received. Defendants
move to dismiss State Farm's claims under Rule 12(b) (6)
for failure to state a claim.
12(b) (6) provides for dismissal of an action for
"failure to state a claim upon which relief can be
granted." Fed.R.Civ.P. 12(b) (6) . When a district court
reviews the sufficiency of a complaint before it receives any
evidence either by affidavit or admission, its task is
inevitably a limited one. See Scheuer v. Rhodes, 94
S.Ct. 1683, 1686 (1974), abrogated on other grounds by
Harlow v. Fitzgerald, 102 S.Ct. 2727 (1982). The issue
is not whether the plaintiff ultimately will prevail, but
whether the plaintiff is entitled to offer evidence to
support the claims. Id.
considering a motion to dismiss under Rule 12(b)(6), the
district court must construe the allegations in the complaint
favorably to the pleader and must accept as true all
well-pleaded facts in the complaint. See Lowrey v. Tex.
A&M Univ. Svs., 117 F.3d 242, 247 (5th Cir. 1997).
To survive dismissal, a complaint must plead "enough
facts to state a claim to relief that is plausible on its
face." Bell Atl. Corp. v. Twombly, 127 S.Ct.
1955, 1974 (2007) . "A claim has facial plausibility
when the plaintiff pleads factual content that allows the
court to draw the reasonable inference that the defendant is
liable for the misconduct alleged." Ashcroft v.
Iqbal, 129 S.Ct. 1937, 1949 (2009). While a complaint
"does not need detailed factual allegations . . . [the]
allegations must be enough to raise a right to relief above
the speculative level, on the assumption that all the
allegations in the complaint are true (even if doubtful in
fact)." Twombly, 127 S.Ct. at 1964-65.
under RICO, 18 U.S.C. § 1962, have three common
elements: Ml) a person who engages in (2) a pattern of
racketeering activity, (3) connected to the acquisition,
establishment, conduct, or control of an
enterprise.'" St. Germain v. Howard, 556
F.3d 261, 263 (5th Cir. 2009) (quoting Abraham v.
Singh, 480 F.3d 351, 355 (5th Cir. 2007)). "A
pattern of racketeering activity consists of two or more
predicate criminal acts that are (1) related and (2) amount
to or pose a threat of continued criminal activity."
Snow Ingredients, Inc. v. SnoWizard, Inc., 833 F.3d
512, 524 (5th Cir. 2016) (quoting St. Germain, 556
F.3d at 263). Dr. Punjwani argues that Plaintiff failed to
plead its RICO claim with particularity as required by Rule
9(b); "failed to plead any one RICO predicate act, let
alone a pattern of racketeering activity"; and failed to
allege any "enterprise."
State Farm's Complaint meets the Rule 9(b) pleading
18, United States Code Section 1961(1) lists a number of
predicate criminal acts, including wire fraud and mail fraud.
RICO claims based on predicate acts of fraud are subject to
the heightened pleading requirements of Rule 9(b).
Tel-Phonic Servs., Inc. v. TBS Int'l, Inc., 975
F.2d 1134, 1138-39 (5th Cir. 1992). Under Rule 9(b), parties
"must state with particularity the circumstances
constituting fraud or mistake." Fed.R.Civ.P. 9(b). To
meet this standard, Plaintiff should "specify the
statements contended to be fraudulent, identify the speaker,
state when and where the statements were made, and explain
why the statements were fraudulent." Sullivan v.
Leor Energy, LLC, 600 F.3d 542, 551 (5th Cir. 2010)
(quoting ABC Arbitrage v. Tchuruk, 291 F.3d 336, 350
(5th Cir. 2002)) .
Punjwani argues that State Farm generally fails to allege any
fraudulent activity because State Farm does not identify a
single patient of PAIN who did not receive the treatment for
which payment was sought and provides no factual basis for
its contention that the services provided by Dr. Punjwani
were unnecessary. However, State Farm's principal
allegation is not that patients did not receive the treatment
they sought from Dr. Punjwani and PAIN but rather that Dr.
Punjwani and PAIN conducted illegitimate evaluations and made
predetermined recommendations for medically unnecessary ESIs.
State Farms's Complaint describes this scheme at length
and provides detailed appendices that identify and illustrate
the alleged fraudulent scheme, including initial exam
reports, MRI reports, operative reports, and demand packages
containing settlement information for the claims at
issue. State Farm's detailed allegations
and appendices provide ample notice of the specifics of Dr.
Punjwani's allegedly fraudulent conduct and are
sufficiently particularized to satisfy Rule 9(b). See
Allstate Ins. Co. v. Benhamou, 190 F.Supp.3d 631, 659-60
(S.D. Tex. 2016) (Harmon, J.) (concluding that detailed
allegations of unnecessary treatment and inflated services
leading to higher insurance claims "make the predicate
acts alleged by Plaintiff plausible") (guoting
Adhikari v. Daoud & Partners, 697 F.Supp.2d 674,
693 (S.D. Tex. 2009) (Ellison, J.)).
State Farm sufficiently pleads predicate acts under
Farm alleges that Dr. Punjwani's actions in the
fraudulent scheme led to repeated violations of the federal
mail fraud statute, 18 U.S.C. § 1341, one of the
predicate acts that may support a RICO
violation. Mail fraud requires "(1) a scheme
to defraud; (2) the use of the mails to execute the scheme;
and (3) the specific intent to defraud." United
States v. Traxler, 764 F.3d 486, 488 (5th Cir. 2014).
Dr. Punjwani allegedly submitted "fraudulent bills and
supporting documentation for evaluations and injections which
either were not performed, were not legitimately performed,
or were not medically necessary, which in turn caused
settlement checks to be deposited in the U.S. mails by [State
Farm] and delivered on or about the dates reflected on Ex.
Punjwani argues that State Farm's pleadings do not state
predicate acts of mail fraud because State Farm makes no
factual allegations that Dr. Punjwani himself fraudulently
used the mail. However, to state a claim for mail fraud,
"the defendant need not personally effect the mailing.
It is sufficient that the defendant . . 'act with
knowledge that the use of the mails will follow in the
ordinary course of business.'" Traxler, 764
F.3d at 488 (quoting Pereira v. United States, 74
S.Ct. 358, 363 (1954)); see also Schmuck v. United
States, 109 S.Ct. 1443, 1447 (1989) (requiring only that
"the use of the mails is a part of the execution of the
fraud") (citation omitted). State Farm's ...