California Court of Appeal Holds Lien Doctor Cannot Establish Fraudulent Medical and Billing Reports Are Protected Activity Under the Anti-SLAPP Statute

In People ex rel. Allstate Insurance Co. v. Rubin (“Rubin”), the Fourth Appellate District, Division Three held that the trial court properly denied defendant’s anti-SLAPP motion because medical reports and bills in support of insurance claims were usual course of business and may not have resulted in litigation.

In Rubin, Allstate Insurance Company et al. (“Allstate”) filed a complaint on behalf of itself and the People (qui tam) against Dr. Sonny Rubin and related medical providers (“Defendants”). Allstate alleged Dr. Rubin who controls two medical companies with a portion of lien patients referred to him by attorneys (Sonny Rubin, M.D., Inc., and Coastal Spine and Orthopedic Specialists, Inc.) prepared fraudulent patient medical reports and billing statements in support of insurance claims. Defendant Dr. Rubin filed an anti-SLAPP motion, arguing the preparation and submission of its medical reports and bills to insurance were protected litigation activities. The trial court denied the anti-SLAPP motion.

Dr. Rubin argued his reports and bills are prepared to be used in litigation. However, Dr. Rubin provided no evidence that he only prepares patient reports and billing for patients to submit as evidence in anticipation of litigation and not for the purposes of settlement for his lien patients, or for other non-lien patients.

The Court of Appeal in addressing the first prong of the anti-SLAPP statute, analyzed when pre-litigation communications constitute protected activity under the statute. In relying on People ex rel. Fire Ins. Exchange v. Anapol (2012) 211 Cal.App.4th 809 (“Anapol”) the court noted that the filing of purportedly false insurance claims is generally not protected right-to-petition activity under the anti-SLAPP statute. Prelitigation communications based on the possibility of litigation in the event of nonperformance are not protected activity under the statute because it is not enough to conclude the claim is made in anticipation of litigation contemplated in good faith and under serious consideration. The Court of Appeal held Dr. Rubin’s reports and bills were not protected activity because they: (1) expressly reference settlement, which acknowledges the possibility that Dr. Rubin’s patients will resolve their claims without resort to court; (2) there was no evidence the reports and bills were intended to be evidence of damages in litigation; and (3) doctors regularly prepare notes or reports and bill for their treatment. Thus, the Court of Appeal affirmed concluding that the documents were prepared in the regular course of business and therefore are not protected activity.

Rubin is important for two reasons. First, it establishes plaintiffs’ attorneys and lien doctors cannot hide behind the litigation privilege to submit inflated and fraudulent medical reports and bills. Second, it demonstrates lien doctors’ bias to establish they over treat and inflate plaintiffs’ bills to increase their damages, which can be used by defendants as a tool in discovery and trial.

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July 15, 2021