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UNITED STATES DISTRICT COURT

IN THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY

Plaintiff,

V.

LOUIS N. RADDEN, DO and SPINE

SPECIALISTS OF MICHIGAN, P.C.,

Defendants.

MILLER, CANFIELD, PADDOCK &

STONE, P.L.C.

By: Thomas W. Cranmer (P25252)

Matthew P. Allen (P5 79 1 4)

Attorneys for Plaintiff

840 W. Long Lake Road, Suite 200

Troy, MI 48098

(248) 267-3381

[email protected]

[email protected]

KATTEN MUCHIN ROSENMAN, LLP

By: Ross 0. Silverman (IL 6226560)

John W. Real (IL 6282236)

Attorneys for Plaintiffs525 West Monroe Street

Chicago IL 60611-3693

(3 12)902-5200

[email protected]

[email protected]

[email protected]

Case No. 14-cv—13299

Hon. John Corbett O’Meara

JoELsoN ROSENBERG, PLC

By: David W. Warren (P32449)

Peter W. Joelson (P51468)

Co-Attorneys for Defendants

30665 Northwestern Highway, Ste. 200

Farmington Hills, MI 48334

(248) 626-9966

dwwarren@joelsonrosenbergcom

pjoelson@joelsonrosenbergxzom

GARY R. BLUIVIBERG, PC

By: Gary R. Blurnberg (P29820)


15011 Michigan Ave.

Dearborn, MI 48126

(313) 230~1 121

g1_'blu1nberg@,g_1gail.com

PADILLA LAW GROUP

DANIEL V. PADILLA (P48634)

GERALD V. PADILLA (P24921)

JEAN E. CHARBONEAU (P43 057)


1821 W. Maple Road

Birmingham, MI 48009

(248) 593-0300

[email protected]

[email protected]


DEFENDANTS' MOTION TO DISMISS PLAINTIFF'S COMPLAINT

PURSUANT TO FED. R. CIV. P. 12§bL§6[

Defendants Spine Specialists of Michigan, P.C., ("SSOM") and Dr. Louis Radden, D.O.

("Dr. Radden"), by and through their attorneys, move to dismiss State Farm's Complaint pursuant

to Rule 12(b)(6) of the Federal Rules of Civil Procedure for the reasons set forth in the attached

brief.

Counsel for Defendants sought concurrence in the relief requested in this motion, and

such concurrence from Plaintiff was denied, necessitating the filing of this motion.

WHEREFORE, Defendants respectfully request this Honorable Court enter an order

dismissing Plaintiffs Complaint pursuant to Rule l2(b)(6) of the Federal Rules of Civil

Procedure.

Law Offices of Gary R. Blumberg P.C Dated: September 26, 2014

By: /s/ Gag: R. Blumberg

Gary R. Blumberg (P29820)

Attorneys for Defendants

JOELSON ROSENBERG PLC

By: /s/ Peter W. Joelson



PADILLA LAW GROUP

By: /s/ Daniel V Padilla

Daniel V. Padilla (P48634)



UNITED STATES DISTRICT COURT

IN THE EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

STATE FARM MUTUAL AUTOMOBILE

INSURANCE COMPANY

Plaintiff,

V.

LOUIS N. RADDEN, D.O and SPINE

SPECIALISTS OF MICHIGAN, P.C.,

Defendants.

MILLER, CANFIELD, PADDOCK &

STONE, P.L.C.

By: Thomas W. Cranmer (P25252)

Matthew P. Allen (P57914)

Attorneys for Plaintiff

840 W. Long Lake Road, Suite 200

Troy, MI 48098

(248) 267-3381

[email protected]

[email protected]

KATTEN MUCHIN ROSENMAN, LLP

By: Ross 0. Silvennan (IL 6226560)

John W. Real (IL 628223 6)

Attorneys for Plaintiffs525 West Monroe Street

Chicago IL 60611-3693

(312)902-5200

[email protected]

[email protected]

[email protected]

Case No. 14-cv-13299

Hon. John Corbett O’Meara

JOELSON ROSENBERG, PLC

By: David W. Warren (P32449)


Co-Attorneys for Defendants.

30665 Northwestern Highway, Ste. 200

Farmington Hills, MI 48334

(248) 626-9966

dwwarren@joelsonrosenbergcom

pjoe1son@joelsonrosenbergcom

GARY R. BLUIVJCBERG, PC

By: Gary R. Blumberg (P29820)

Co-Attorneys for Defendants.

15011 Michigan Ave.

Dearborn, MI 48126

(313) 230-1121

[email protected]

PADILLA LAW GROUP

DANIEL V. PADILLA (P48634)

GERALD V. PADILLA (P24921)

JEAN E. CHARBONEAU (P43057)

Co-Attomeys for Defendants

1821 W. Maple Road

Birmingham, MI 48009

(248) 593-0300

[email protected]

[email protected]


BRIEF IN SUPPORT OF DEFENDANTS' MOTION TO DISMISS

PLAINTIFF‘S COMPLAINT PURSUANT TO FED. R. CIV. P. 12[b1§6[


TABLE OF CONTENTS

ISSUES PRESENTED ................................................................................................................................................. ..i

CONTROLLING OR MOST APPROPRIATEAUTHORITIES

I. INTRODUCTION ........................................................................................................................................ .. I

II. STATEMENT OF FACTS ........................................................................................................................... .. 2

A. Michigan's No—Fault Insurance Act ................................................................................................ .. 2

B. State Farm's Legislative Efforts to Reduce or Limit No—Fault Benefits Have Failed ..................... .. 3

C. Dr. Louis Radden, D.O. .................................................................................................................. ..4

III. ANALYSIS ............................. .................................................................................................................... ..4

A. Standard of Review ..................................... ................................................................................. .. 4

B. State Farm's Conclusory Allegations Should be Disregarded......................................................... .. 5

1. The "Predeterrnined Protocol“ .......................................................................................... .. 6

a. There is No Evidence that Dr. Radden Failed to Perform LegitimateExaminations ...................................................................................................... .. 6

There is No Evidence that Dr. Radden Provided Treatment That Was Not

Medically Necessary" .......................................................................................... .. 7

There is No Evidence that Dr. Radden Improperly Administered Treatments..... 8

There is No Evidence That Dr. Radden Billed State Farm for Treatments That

Were Not Actually Performed ............................................................................ .. 8

State Farm's Count I for Fraud Against All Defendants is Insufficient Under Rules 8 and 9(b) .... .. 9

1. State Farm Does Not Specify Which Statements it Contends Were Fraudulent .............. .. 9

2. State Farm Fails to Identify the Speaker of the Alleged Fraudulent Statements ............ .. 10

3. State Farm Fails to Explain Why the Statements Were Fraudulent ................................ .. 11

State Farm's Count II for RICO Under §l962(c) Against Dr. Radden Fails as a Matter of Law.... 11

1. RICO Pleading Requirements ........................................................................................ .. 11

2. The Complaint’s Allegations of Mail Fraud Fail to Meet the Pleading Requirements ofFed. R. Civ. P 12

Having Failed to Properly Plead Mail Fraud, the Complaint Fails to Plead a Pattern ofRacketeering Activity ..................................................................................................... .. 15


The RICO Claim (or a portion of it) is Time-Barred...................................................... .. 15

State Farm Has Voluntarily Waived Any Right to Contest the Propriety of Claims

Previously 17

State Farn1's Claim for Unjust Enrichment is Predicated on the Same Lnsufficient Fraud

Allegations and Therefore Fails as a Matter of Law ..................................................................... .. 17

F. State Farm's Fraud and Unjust Enrichment Claims (or portions thereot) Are Ti1ne—Barred ......... .. 19

G. State Farm’s Declaratory Judgment Claim (Count IV) is Not Proper 20


ISSUES PRESENTED

I. Should this Honorable Court dismiss Counts I and II because the counts fail to allege a

basis for Defendants’ liability and otherwise meet pleading requirements of Rules 8(a)(2) and

9(b) for fraud?

Defendants say: Yes.

II. Should this Honorable Court dismiss Count II because of the failure to satisfy pleading

requirements and establish a pattern of racketeering activity?


III. Should this Honorable Court dismiss Count III of Plaintiffs Complaint for Unjust

Enrichment because (a) such claim is precluded by the existence of a Written insurance

agreement, (b) Plaintiff merely recites the elements of unjust enrichment in conclusory fashion,

(0) Plaintiffs unjust enrichment claim is grounded in fraud and Plaintiff has failed to meet the

pleading requirements of Fed. R. Civ. P. 9(b) with respect to the asserted Common Law Fraud

and RICO claims, and (d) unjust enrichme11t’s six-year statute of limitations bars Plaintiffs

recovery on all payments before August 28, 2008?


IV. Should this Honorable Court dismiss Count IV seeking a Declaratory Judgment under 28

U.S.C. § 2201 because the Scottsdale factors favor that the Court decline to exercise jurisdiction

on State Farm’s declaratory judgment claim?

Defendants say: Yes. .

V. Should this Honorable Court dismiss Count I (common law fraud as to all Defendants)

asserting liability for all claims for reimbursement submitted by Defendants before August 23,

2008, because common law fraud’s six-year statute of limitations bars Plaintiffs recovery on all

such requests for reimbursement?



CONTROLLING OR MOST APPROPRIATE AUTHORITIES

18 USC §1962(c) ............................................................................................................... ..1,11, 12

13 USC§1964(c) ........................................................................................................................ ..11

28 USC § 2201(a) ........................................................................................................................ ..20

MCL § 600.5813 .......................................................................................................................... ..19

MCL § 600.5827 .......................................................................................................................... ..19

Fed. R. Civ. P. 90;) ................................................................................ ..5, 9, 11, 12, 13, 19, 20, 22

Fed. R. Civ. P. 12(b)(6) ...................................................................................................... ..4, 11,22

Ashcrofi‘ v. Iqbal, 556 U.S. 662 (2009) ...................................................................................... ..4, 5

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ......................................................... ..4, 5, 13

Frank v. Dana Corp, 547 F.3d 564 (6th Cir. 2008) ............................................................ ..5, 9, 13

Hard v. The Environmental Research Institute ofMichigan, 463 Mich. 399, 617 N.W.2d 543

(2000) ............................................................................................................................................. ..9

Percival v. Girard, 692 F. Supp. 2d 712 (E.D. Mich. 2010) ......................................................... ..4

Scottsdale Ins. Co. v. Flowers, 513 F.3d 546 (6th Cir. 2008)................................................ ..20, 21


CITED AUTHORITIES

18USC §1962(c) ............................................................................................................... ..1,11,12

13 USC§1964(c) ........................................................................................................................ ..11

23 USC § 2201(a) ........................................................................................................................ -20

MCL § 600.5813 .......................................................................................................................... ..19

MCL § 600.5827 .......................................................................................................................... ..19

Michigan No Fault Act, MCL § 500.3101 ..................................................................... ..2, 3, 16, 17

Fed. R. Civ. P. 9(b) ................................................................................ ..5, 9, 11, 12, 13, 19, 20, 22

Fed. R. Civ. P. 12(b)(6) ...................................................................................................... ..4, 11, 22Fed. R. Civ. P. 57 ......................................................................................................................... ..20

Advocacy Org. for Patients & Providers v. Auto Club Ins. Ass ‘n, 257 Mich. App. 365 (2003) ...16Aetna Casualty and Sur. Co. v. Sunshine Corp., 74 F.3d 685 (6th Cir. 1996) ............................ ..20

Agency Holding Corp. v. Mally—Dufi’& Assocs., Inc., 483 US. 143 (1987) ............................... ..15

All Erection & Crane Rental Corp. v. Acordia Nw., Inc., 162 Fed. Appx. 554 (6th Cir. 2006) ...12

American Home Assurance Co. v. Evans, 791 F.2d 61 (6th Cir. 1986) ...................................... ..22

Andersons, Inc. v. Consol, Inc., 348 F.3d 496 (6th Cir. 2003) .................................................... ..17

Angott v. Chubb Group ofIns. Cos., 270 Mich. App. 465 (2006) ............................................... ..17

Ashcrofi‘ v. Iqbal, 556 U.S. 662 (2009) ...................................................................................... ..4, 5

Beck v. Cantor Fitzgerald & Co., 621 F. Supp. 1547 (N.D. Ill. 1985) ........................................ ..12

Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) ......................................................... ..4, 5, 13

Boston v. Clark, 2012 U.S. Dist. LEXIS 130496 (E.D. Mich. Sept. 13, 2012) ........................... ..19

Durant v. Servicemaster Co., 159 F. Supp. 2d 977 (E.D. Mich. 2001) ................................. ..12, 14

Frank v. Dana Corp., 547 F.3d 564 (6th Cir. 2008) ............................................................ ..5, 9, 13

Gotham Prints, Inc. v American Speedy Printing Ctrs., Inc., 863 F. Supp. 447(E.D. Mich. 1994) ........................................................................................................................ ..14

Hall Am. Ctr. Assocs. Ltd. Partnership v. Dick, 726 F. Supp. 1083 (E.D. Mich 1989) .............. ..12

Harrison v. Westinghouse Savannah River Co., 176 F.3d 776 (4th Cir. 1999) ........................... ..13

Hora’ v. The Environmental Research Institute ofMichigan, 463 Mich. 399, 617 N.W.2d 543(2000) ............................................................................................................................................. ..9

Jackson v Segwick Claims Mgt. Servs., Inc., 699 F.3d 466 (6th Cir. 2012) .................................. ..5

Matthews v. Mortg. Elec. Registration Sys., 2011 US. Dist. LEXIS 69501 (E.D. Mich. Apr. 5,2011) ....................................................................................................................................... ..'.....18

Moore v. First Security Cas. Co., 224 Mich. App. 370 (1997) ................................................... ..17

Novak v. Nation Wide Mut. Ins., Co, 235 Mich. App. 675, 599 N.W.2d 546 (1999) .................... ..9

Oak St. Funding, LLC v. Ingram, 749 F. Supp. 2d 568 (E.D. Mich. 2010) ................................. ..18

Paycom Billing Services, Inc. v. Payment Resources International, 212 F. Supp. 2d 732 (W.D.Mich. 2002) .................................................................................................................................. ..13

Percival v. Girard, 692 F. Supp. 2d 712 (E.D. Mich. 2010) ......................................................... ..4

Rotella v. Wood, 528 U.S. 549 (2000) ......................................................................................... ..15

Scottsdale Ins. Co. v. Flowers, 513 F.3d 546 (6th Cir. 2008)................................................ ..20, 21

Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479 (1985) ............................................................. ..12, 15

Taylor Group 11. ANR Storage Co., 24 Fed. Appx. 319 (6th Cir. Nov. 8, 2001) ......................... ..15


United States ex rel. Marlar v. BWXT Y—]2, L.L.C., 525 F.3d 439 (6th Cir. 2008)..................... ..13

VanDenBr0eck v. C0mmonPot'm‘ Mortg. C0., 210 F.3d 696 (6th Cir. 2000) .............................. .. 12

Williams v. Pledged Prop. II, LLC, 508 Fed. Appx. 465 (6th Cir. 2012) .............................. ..16, 18

Wilton v. Seven Falls Co., 515 U.S. 277 (1995) .......................................................................... ..20


INTRODUCTION

Plaintiff State Farm Mutual Automobile Insurance Company (“State Farm“ or “Plaintiff“)

has been on a RICO-rampage for the past several years, declaring war against Michigan's

physicians, chiropractors, and other medical treatment providers, as well as its own insureds.

Defendant Dr. Louis Radden, D.O. ("Dr. Radden") and his entity, Spine Specialists of Michigan

("SSOM") are State Farm's latest Victims.

State Farm's Complaint against Dr. Radden and SSOM (together "Defendants") alleges

four causes of action: Count I is for common law fraud against Dr. Radden and SSOM; Count II

is for Violations of the federal RICO statute, §l962(c), against Dr. Radden only; Count III is for

unjust enrichment against both Dr. Radden and SSOM; and Count IV is for declaratory relief

against SSOM only. (See Plaintiffs Complaint, Dkt. #1).

State Farm alleges that Defendants submitted Via the US mail, fraudulent medical No-

Fault Act claims to State Farm in violation of 18 USC § l962(c). State Farm's RICO claim

against Dr. Radden (Count II) as well as its claims for unjust enrichment (Count III) and

declaratory relief (Count IV) are all dependent on State Farm‘s claim for common law fraud

against Defendants (Count I). Because State Farm failed to properly plead its claim for common

law fraud against Dr. Radden and SSOM, its RICO, unjust enrichment, and declaratory judgment

claims fail as well.

As demonstrated by the Complaint’s conclusory, deficient, and false allegations and lack

of factual support, State Farm’s claims are Without merit. The Complaint — and particularly the

RICO claims — is nothing more than an attempt to back-door the Michigan Legislature’s No

Fault System. State Farm and its counterparts in the insurance industry have notoriously filed

scores of similar lawsuits and claims against hundreds of other defendants as part of a manifest


effort to suppress medical providers’ rights to reimbursement under Michigan’s No-Fault Act.

State Farm attempts in this case to achieve through litigation what it has not been able to

accomplish through legislative change.

II. STATEMENT OF FACTS

A. Michigan's N0-Fault Insurance Act.

State Farm’s claims center on the submission of purportedly fraudulent insurance claims

by Defendants for reimbursement of services provided to patients injured in automobile

accidents pursuant to Michigan’s No-Fault Insurance Act, MCL § 500.3101 et seq (the “No-

, Fault Act”). “An insurer is liable to pay benefits for accidental bodily injury arising out of the

ownership, operation, maintenance or use of a motor vehicle as a motor vehicle.” MCL §

500.3105. No—fault benefits are statutorily referred to as “personal protection insurance benefits”

and are often referred to as “PIP benefits." Under Michigan law, these PIP benefits are typically

paid by the victim’s own insurance company and are always paid regardless ofwho was at fault

for the accident. .

No-Fault PIP benefits payable under Michigan’s system include certain “allowable

expenses” which are statutorily described as “all reasonable charges incurred for reasonably

necessary products, services and accommodations for an injured person’s care, recovery or

rehabilitation.” MCL 500.310’/'(1)(a). The statute contains no further definition of the scope and

extent of these allowable expenses. However, various court decisions have established that

allowable expenses include a wide variety ofproducts and services, including medical and

hospital expenses; in-home nursing or attendant care; residential accommodations; room and

board expenses; physical and vocational rehabilitation; special motor vehicle transportation;

medical transportation mileage; guardianship expenses; etc. Although the statute as a whole


focuses on the insurer and the insured individual named in the policy, the No-Fault Act also

provides that:

A physician, hospital, clinic or other person or institution lawfully rendering treatment to

an injured person for an accidental bodily injury covered by personal protection

insurance, and a person or institution providing rehabilitative occupational training

following the injury, may charge a reasonable amount for the products, services andaccommodations rendered.

MCL § 500.3157.

Insureds can assign their contractual right to no-fault benefits to providers of medically

necessary services and, pursuant to the assignments, providers may submit the insureds’ claims

directly to insurers. The No-Fault Act does not contain any provision for the recovery of benefits

paid to or for the benefit of the person named in the policy except for the limited circumstances

set forth in MCL § 500.3116. (See also MCL § 500.3146).

B. State Farm's Legislative Efforts to Reduce or Limit N0-Fault Benefits HaveFailed. -

It is well-documented that for the past several years, State Farm and other insurers have

made numerous attempts to change the No-Fault Act for the benefit of the insurers and to the

detriment of the insureds.‘ This instant lawsuit is an attempt to achieve through litigation what

-State Farm has not been able to achieve through legislative change. State Farm and its

counterparts in the insurance industry have filed scores of RICO and other similar lawsuits

against hundreds of other medical providers around the country as part of a blatant effort to

suppress the rights ofmedical providers to receive reimbursement and to suppress the rights of

its insureds to select their own treatment providers.

1 See 2011 H.B. 4936 and 201 1 SB 0294, both of which were attempts to place a cap or limit on Michigan'scurrently unlimited medical benefits for those injured in motor vehicle accidents.

3


C. Dr. Louis Radden, D.O.

Dr. Louis Radden, D.O., is a board-certified in Osteopathic Medicine and Surgery and

has been practicing medicine in Michigan since 2006. (Exhibit 1, Dr. Radden's Curriculum

Vitae). Dr. Radden opened Spine Specialists of Michigan, P.C., in 2006 and is affiliated with

Crittenton Hospital Medical Center, Doctors Hospital, Huron Valley Hospital, Oakland Regional

Hospital, Pontiac Osteopathic Hospital, Providence Park Hospital, St. Joseph Mercy-Oakland

and St. Mary Mercy Hospital. Dr. Radden is an expert in the diagnosis and treatment of complex

back and spinal problems and has a medical reputation that is beyond reproach in the community

and with his patients. Dr. Radden treats many patients and has no history of license complaints

and has never been disciplined.

III. ANALYSIS

A. Standard of Review.

When ruling on a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6),

the Court must construe the complaint in a light most favorable to the plaintiff and accept all of

the factual allegations as true. Percival v. Girard, 692 F. Supp. 2d 712, 717 (ED. Mich. 2010).

In doing so, “the court must draw all reasonable inferences in favor of the” non—moving party. Id.

Although a heightened fact pleading of specifics is not required, the plaintiff must bring forth

“enough facts to state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v.

Twombly, 550 U.S. 544, 570 (2007). “[O]nly a complaint that states a plausible claim for relief

survives a motion to dismiss.” Aslzcrofi‘ v. Iqbal, 556 U.S. 662 (2009).

“Though decidedly generous, this standard of review does require more than the bare

assertion of legal conclusions.” Percival, 692 F. Supp. 2d at 717 (citing Lillard 12. Shelby County

5:14-cv-13299-JCO-MJH Doc # 16 Filed 09/30/14 Pg 15 of 39 Pg ID 246

. misrepresentations upon which it relied. Id. See also Jackson v Segwick Claims Mgr. Servs., Inc.

5:14-CV-13299-JCO-MJH DOC # 16 Filed 09/30/14 Pg 15 Of 39 Pg ID 246

Bd. ofEduc, 76 F.3d 716, 726 (6th Cir. 1996)). This Court is not “bound to accept as true a

legal conclusion couched as a factual allegation.” Twombly, 550 U.S. at 555.

If a complaint fails these requirements, then a Motion to Dismiss should be granted,

before the parties are allowed to proceed to discovery. Id. at 559. Filing a complaint “does not

unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. . . . Only

a complaint that states a plausible claim for relief survives a motion to dismiss.” Iqbal, 556 U.S.

at 679. Thus, pleas for deficient complaints to go forward in attempt to obtain discovery in

order to make a plausible claim should be denied.

Claims alleging fraud have an even higher standard of review. To meet the particularity

requirements of Rule 9(b), a plaintiffmust ‘‘(I) specify the statements that the plaintiff contends

were fraudulent, (2) identify the speaker, (3) state where and when the statements were made,

and (4) explain Why the statements were fraudulent.” Frank v. Dana Corp, 547 F.3d 564, 569

(6th Cir. 2008). At a minimum, Plaintiff must allege the time, place, and contents of the

699 F.3d 466, 476 (6th Cir. 2012) (citations omitted). Because Plaintiffs Complaint fails to

state a claim upon which relief could be granted for any of its claims, the Complaint should be

dismissed.

B. State Farm's Conclusory Allegations Should be Disregarded.

Ashcroft v. Iqbal, 556 U.S. 662 (2009), requires the Court, as a first step in its review of a

complaint under a motion to dismiss, to identify and disregard conclusory allegations. Id. at 663-

664. Then, accepting as true the remaining allegations, the court determines whether the claim is

plausible. Id. at 664. State Farm's Complaint is replete with conclusory allegations that must be


disregarded. Many of the allegations are simply false and/or contradicted by the exhibits State

Farm attached to its Complaint.

1. The "Predetermined Protocol."

State Farm's entire Complaint is based on the supposed existence of a "Predetermined

Protocol" established by Defendants (though State Farm does not identify which Defendant

created the alleged “protocol") for examining and treating patients, and then billing State Farm

for treatment that was either not performed or was performed pursuant to the "predetermined

protocol." State Farm uses this catchphrase "Predetermined Protocol" repeatedly throughout the

Complaint, but fails to identify any factual support for the notion that there is or ever was a

"protocol" whatsoever, much less a protocol that was both fraudulent and "predetermined."

a. There is No Evidence that Dr. Radden Failed to Perform

Legitimate Examinations.

According to State Farm, "[t]he scheme begins with Dr. Radden’s fiaudulent examination

of patients." (Dkt. #1, 1] 33). However, the patient whose deposition testimony State Farm

attached to its Complaint as exhibit 10 testified that Dr. Radden performed a physical

examination on the first day of treatment. (Dkt. #1, Exhibit 10, 24 1] 17-20). State Farm does not

produce or identify any evidence that could be reasonably interpreted to show that Dr. Radden

does not perform legitimate physical examinations of his patients. Despite the glaring lack of

evidence (and testimony to the contrary attached to State Fa.rm’s Complaint, Dkt #1), State Farm

concludes:

41. Given the uniform patterns appearing among all ofthe Exam Reports, the Exam

Reports do not reflect legitimate descriptions of patients’ pain or the results of a

legitimate examination, but instead reflect predetermined findings that Dr. Radden uses

to justify his decision to subject patients to medically unnecessary ESIS, F15, and MBBS.

The prevalence and uniformity of the patient complaints, findings, and diagnoses are

simply not credible.

Dkt. #14141.


Paragraph 41 of the Complaint is emblematic of the fatal deficiencies in State Farm’s

Complaint. State Farm first identifies what it purports to be "patterns" among the exam reports

based similarities in the reports for a sample ofpatients comprising a fraction of Dr. Radden's

business selected by State Farm, and then concludes that the existence of a "pattern" proves that

the exam reports are not credible, which in turn proves that Dr. Radden is carrying out a

fraudulent scheme. These are not factual allegations, but a series of conclusions that do not

satisfy the pleading requirements for fraud, RICO, or any other cause of action.

b. There is No Evidence that Dr. Radden Provided Treatment

That Was Not Medically Necessary.

The next step in the "predetermined protocol" is for Dr. Radden to "subj ect[] patients to a

uniform protocol of injections that is predetermined, is not tailored to the unique needs of any

patient, does not evaluate or respond to any changes in the patients’ conditions, and subjects

patients to substantial undue risks and costs." (Dkt. #1, 1144). State Farm specifically attacks

Dr. Radden using injections as a treatment method for back and neck injuries. State Farm refers

generally to a list of medical guidelines that supposedly provide that "routine series of three

inj ections," like those recommended and performed by Dr. Radden, is never indicated." (Dkt. #1,

1] 46). State Farm does not specifically identify any study, guideline, or other authority to

support its conclusion that the treatments recommended and performed by Dr. Radden are

"never indicated." In fact, the patient testimony State Farm cites shows that the patient saw

improvement in his condition after a third round of injections. (Dkt. #1, 11 56). Although the

patient testified that his condition improved, State Farm still concludes that "there was no

appropriate basis upon which to perform the first injection procedure, or any of the other

procedures that followed." (Dkt. #1, fil 56).


There is No Evidence that Dr. Radden ImproperlyAdministered the Treatments.

Though not named as defendants or even part of the alleged RICO enterprise, State Farm

accuses various anesthesia providers of billing for improper or unnecessary services in

connection with Dr. Radden's treatments. State Farm goes on to grossly and intentionally

mischaracterize Dr. Radden‘s testimony in a deposition in an unrelated matter, stating that Dr.

Radden "has testified it is part of his predetermined protocol to sedate patients before performing

injection procedures, regardless of whether it is medically necessary to do so." (Dkt. #1, ‘H 61).

State Farm's "summary" of Dr. Radden's deposition testimony is so blatantly inaccurate that it

amounts to a fraud upon the Court. At no point in Dr. Radden's testimony does he acknowledge

or admit to having or using a "predetermined protocol" or that he sedates patients "regardless of

whether it is medically necessary to do so." State Farm knowingly made false allegations in

paragraph 61 of its Complaint for the purpose of harassing and intimidating Dr. Radden. This

conduct is typical for State Farm and is indicative of its mendacious motive for bringing this

lawsuit against Dr. Radden.

(1. There is No Evidence That Dr. Radden Billed State Farm for

Treatments That Were Not Actually Performed.

State Farm also accuses Dr. Radden and/or SSOM ofbilling for treatments that were

never actually performed. (Dkt. #1, 1] 82, 90, 95). State Farm does not provide any factual

support for this accusation, and the patients testimony State Farm attached as Exhibit 10 to its

Complaint confirms that Dr. Radden in fact administered the treatment and performed the

injections. State Farm does not include or even refer to any testimony from anyone claiming to

have not received treatments.


C. State Farm's Count I for Fraud Against All Defendants is Insufficient Under

Rule 9(b).

Claims alleging fraud must meet the heightened pleading requirements of Rule 9(b). To

sustain its claim for common law fraud (Count 1) against Dr. Radden and SSOM, State Farm was

required to “(l) specify the statements that the plaintiff contends were fraudulent, (2) identify the

speaker, (3) state where and when the statements were made, and (4) explain why the statements

were fraudulen .” Frank v. Dana Corp, 547 F.3d 564, 569 (6th Cir. 2008). At a minimum,

Plaintiff must allege the time, place, and contents of the misrepresentations upon which it relied.

Id.

To sustain a claim of fraud, State Farm must Show that the Defendants made a false,

material representation of a then-existing fact, intending State Farm to rely on it; and that State

Farm actually relied on the representation, to its detriment. See Hard v. The Environmental

Research Institute ofMichigan, 469 Mich. 399, 404, 617 N.W.2d 543 (2000). Additionally,

State Farm's reliance must be reasonable. Novak v. Nation Wide Mut. Ins, Co, 235 Mich. App.

675, 690-91, 599 N.W.2d 546 (1999).

1. State Farm Does Not Specify Which Statements it Contends WereFraudulent. '

State Farm does not identify any statements that it contends were fraudulent. State Farm

only identified a few statements in various examination reports and other records that were

repeated in other reports and /or records. (Dkt. #1, ‘H 34-43). State Farm apparently concluded

that any statement that appeared more than once in a report or record was fraudulent simply

because it appeared more than once. This circular logic is insufficient to support a claim for

fraud under any pleading standard, much less the heightened requirements of Rule 9(b). In short,

State Farm specifies which statements were repeated in different reports and records, but does


not adequately allege that those same statements were false, nor does it specify which statements

appearing in each report or record were false. To meet its pleading requirements, State Farm

needed to identify specific statements of then-existing material facts in Defendant's records or

reports it claims were fraudulent. Instead, State Farm identified a few statements that appeared

in multiple documents and alleged that each statement was fraudulent each time it was made

simply by virtue of having been repeated in more than one document.

For instance, State Farm identified the statement related to the patient's leg lengths, "his

or her leg lengths are equal" as one of the statements appearing for nearly all patients (Dkt. #1, ll

38). The allegation appears to be that each time Dr. Radden stated in a report that the patient's

leg lengths are equal, that statement was fraudulent. To meet its pleading requirement, State

Farm needed to identify which patients for whom this statement was false and therefore

fraudulent. State Farm failed to do this and, as result, this claim must fail.

2. State Farm Fails to Identify the Speaker of the Alleged FraudulentStatements.

State Farm names both Dr. Radden and SSOM as defendants for its common law

fraud (Count I) claim. State Farm alleges that “Defendants intentionally and knowingly made

false and fraudulent statements of material fact to State Farm by submitting, and causing to be

submitted, at Dr. Radden’s direction, thousands of bills and related documentation that are

fraudulent and contained false representations of material fact." (Dkt. #1, ll 82). State Farm does

not specify which statements were made by Dr. Radden and which by SSOM. (Dkt. #1, ll 82~

86). Without identifying the fraudulent statements made by Dr. Radden, State Farm cannot

sustain its fraud claim against Dr. Radden. Without identifying the fraudulent statements made

by SSOM, State Farm cannot sustain its fraud claim against SSOM. State Farm has failed to

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establish which Defendant made which fraudulent statement, and therefore carmot establish

culpability for either Defendant.

3. State Farm Fails to Explain Why the Statements Were Fraudulent.

State Farm’s theory for its fraud claim is that because certain statements were made for

multiple patients or in multiple records, the statements were fraudulent. State Farm only alleges

that certain statements were made repeatedly and then leaps to the conclusion that those

statements must have been fraudulent. This explanation is circuitous and insufficient. State

Farm does not allege that statements made in the examination reports or other records were

fraudulent because they misrepresented a then-existing material fact; for example, that the

statement "the patient is alert and oriented times three" is fraudulent because when Defendants

made that statement the patient was not alert or oriented. State Farm asserts that this statement is

fraudulent only because it was repeated for multiple patients. The Court is reminded that Dr.

Radden is a specialist who treats patients with complex back and spinal problems.

As stated above, State Farm's naked assertion of fraud is based on conclusory allegations,

devoid of factual support, and should be dismissed pursuant to Rule 9(b) and 12(b)(6). Because

the remaining causes of action in State Farm's Complaint rely upon the fraud claim, State Farm's

Complaint should be dismissed in its entirety.

D. State Farm's Count II for RICO Under §1962(c) Against Dr. Radden Fails asa Matter of Law.

1. RICO Pleading Requirements.

A plaintiff must allege that a defendant violated the substantive RICO statute, 18 U.S.C.

§ 1962, and must also allege that he was “injured in his business or property by reason of a

Violation of § 1962.” 18 U.S.C. § 1964(c). State Farm accuses Dr. Radden of violating 18 USC §

1962(c). In order to prevail under 18 U.S.C. §1962(c), “a plaintiffmust show (1) conduct, (2) of

11


an enterprise, (3) through a pattern, (4) of racketeering activity.” Sedima, S.P.R.L. v. Imrex Co.,

473 U.S. 479, 496 (1985); see also Hall Am. Ctr. Assocs. Ltd. Partnership v. Dick, 726 F. Supp.

1083, 1087 (E.D. Mich 1989). Where a complaint “fail[s] to even address each of the

prerequisite elements necessary to state a claim for civil RICO,” such a claim is properly

dismissed. All Erection & Crane Rental Corp. v. Acorclia Nw., Inc., 162 Fed. Appx. 554, 557

' (6th Cir. 2006); see also Durant v. Servicemaster C0., 159 F. Supp. 2d 977, 981 (E.D. Mich.

2001) (“Because of the opprobrium that a RICO claim brings to a defendant . . . courts should

eliminate frivolous RICO claims at the earliest stage of litigation”). “If plaintiff cannot plead a

separate, lasting enterprise apart fiom each defendant alleged to be liable under Section 1962(0)

and specify the predicate acts and conduct of that enterprise by each allegedly liable defendant

with particularity, in separate counts, he has no business charging RICO Violations.” Beck v.

Canror'Fitzgerald& Co., 621 F. Supp. 1547, 1563 (N.D. Ill. 1985).

2. The Complaint’s Allegations 01' Mail Fraud Fail to Meet the

Requirements of Fed. R. Civ. P 9(b).

“A RICO Complaint must allege facts which would, if proved, constitute acts indictable

under the listed [predicate acts of racketeering activity] statutes. In a sense, RICO is derivative.”

DeL0rean v. Cork Gully, 118 B.R. 932, 940 (E.D. Mich. 1990). The only RICO predicate act

alleged to have been committed by Dr. Radden is mail fraud (18 USC § 1341) (Dkt. #1, 1187-92).

Mail fraud is proven by showing “(1) a scheme or artifice to defraud combined with (2)

either a mailing or an electronic communication (3) for the purpose of executing the scheme.”

VanDenBr0eclc v. C0mmonP0z'nz‘ Mortg. C0., 210 F.3d 696, 701 (6th Cir. 2000). An actionable

scheme or artifice to defraud is defined as “intentional fraud, consisting in deception

intentionally practiced to induce another to part with property or to surrender some legal right,

and which accomplishes the designed end.” Id.; see also Hall, 726 F. Supp. at 1093.

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State Farm is required to allege facts that establish (or that at least give rise to the

reasonable inference) that Dr. Radden, using SSOM as a vehicle, operated a scheme with the

specific intent to defraud State Farm using the U.S. Mails to delivery false or fraudulent

materials. As noted above, because Plaintiffs RICO claims allege mail fraud as an element,

Plaintiff must also satisfy the heightened particularity requirements of Rule 9(b) with respect to

the elements of fraud. Paycom Billing Services, Inc. v. Payment Resources International, 212 F.

Supp. 2d 732, 736 (W.D. Mich. 2002).

To meet the particularity requirements of Rule 9(b), State Farm must, at a minimum, “(l)

specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3)

state where and when the statements were made, and (4) explain Why the statements were

fraudulen .” Frank 12. Dana Corp., 547 F.3d 564, 569-70 (6th Cir. 2008). A plaintiff must also

provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause

of action will not do.” Twombly, 550 U.S. at 55 5. The heightened pleading requirement of Rule

9(b) serves multiple purposes, including: protecting defendants from “abusive litigation” and

“fishing expeditions,” protecting businesses and individuals from reputational harm, and putting

defendants on notice of the specific charged conduct so they can prepare responsive pleadings.

United States ex rel. Marlar v. BWX2" .Y—]2, LLC, 525 F.3d 439, 445 (6th Cir. 2008). Rule 9(b)

is also designed to “eliminate fraud actions in which all facts are learned after discovery.”

Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir. 1999). State Farm’s

Complaint utterly fails to meet the pleading requirements of 9(b) with respect to its mail fraud

claim. State Farm’s reliance on the exhibits to the Complaint cannot save its mail fraud claim. In

relying on the exhibits, State Farm utterly fails to meet its obligation to specify which statements

within the exhibits are fraudulent. Instead, the summaries generically identify categories such as


the initials of the patient, date of loss, dates of service, total visits and diagnoses (see e. g., Dkt.

#1, Exhibits 1A-3). Put another way, State Farm has not alleged “facts to show which of the

Defendants caused what fraudulent statements to be mailed, together with when and how each

mailing fiirthered the scheme. ” Gotham Prints, Inc. v American Speedy Printing Ctrs., Inc., 863

F. Supp. 447, 458 (E.D. Mich. 1994).

The RICO claim (Count II) against Dr. Radden fails because of the same deficiencies in

State Fa:rm's common law fraud claim (Count I) discussed above. For instance, State Farm

alleges that the services were fraudulent because they were either (1) not performed or (2) not

medically necessary. However, State Farm does not break down which category of alleged fraud

(1 or 2 above) each purported fraudulent submission belongs to. The Court and Defendants are

then left to guess from the Complaint exactly which category each complained-of transgression

falls. Dismissal is warranted here because State Farm has failed to provide any factual support

for its conclusory allegations that the services were either not performed or not medically

necessary. The excerpts of deposition testimony from a patient directly contradict State Farm's

allegations, and the exhibits State Farm relies upon as evidence of a pattern (IA-1B) were

created by State Farm based on samples of data selected by State Farm to give the impression

that a pattern exists.

Indeed, State Fa;rm’s failure to allege facts - as opposed to unsupported conclusions - is

not surprising because no such facts exist. As this Court previously instructed, “courts should

eliminate frivolous RICO claims at the earliest stage of litigation." Durant v. Servicemaster C0,,

159 F. Supp. 2d 977, 981 (ED. Mich. 2001).


Having Failed to Properly Plead Mail Fraud, the Complaint Fails to

Plead a Pattern of Racketeering Activity.

“[R]acketeering activity consists of no more and no less than the commission of a

predicate act.” Sedima, 473 U.S. at 495. As detailed above, the only racketeering activity

alleged to have been committed by Dr. Radden is the predicate act of mail fraud. Having failed

to plead mail fraud with the requisite specificity, State Farm has thus failed to plead a pattern of

racketeering activity as required by the RICO statute.

4. The RICO Claim (or a portion of it) is Time Barred.

State Farm alleges that “Defendants” scheme began in 2007, and has continued

uninterrupted since that time.” (Dkt. #1, 1] 4, 74, 90). The Supreme Court established a four-year

statute of limitations period for civil RICO claims in Agency Holding Corp. v. Molly-Duff &

Assoca, Inc, 483 U.S. 143, 156 (1987). In Rotella v. Wood, 528 U.S. 549, 555-57 (2000), the

Supreme Court explicitly rejected the “injury and pattern discovery” rule as to When the statute

of limitations begins to run. “{D]iscovery of the injury, not discovery of the other elements of a

claim, is what starts the clock.” Id. at 555. “The limitations period for RICO claims accrues when

a plaintiff knew or should have known of an injury.” Taylor Group v. ANR Storage C0,, 24 Fed.

Appx. 319, 325 (6th Cir. Nov. 8, 2001) (citing Rotella).

“The plaintiff is deemed to have constructive knowledge of the injury when it had enough

information to warrant an investigation which, if reasonably diligent, would have led to

discovery of the fraud.” Gregory P. Joseph, CIVIL RICO: A DEFINITIVE GUIDE, 239 (3d ed.

2010). As stated in by the Sixth Circuit in Isaak v. Trumbull .S'&L Co., 169 F.3d 390, 399 (6th

Cir. 1999):

[T]he running of the statute of limitations begins when a plaintiff is put on inquiry notice

-- that is, when the plaintiff has been presented with evidence suggesting the possibility

of fraud. Inquiry notice is triggered by evidence of the possibility of fraud, not full

exposition of the scam itself. . . . The plaintiff need only possess a low level of

15


awareness; he need not fully learn of the alleged wrongdoing. Knowledge of all facts is

not required to set off the prescriptive clock. Thus, the clock begins to tick when a

plaintiff senses “storm warnings,” not when he hears thunder and sees lightning.

Id. Any alleged injuries were known by State Farm when it made payments on claims for

reimbursements as early as 2007, well over four (4) years prior to this Complaint being filed.

State Farm acknowledges that it has a statutory and contractual obligation to promptly pay PIP

Benefits. (Dkt. #1, 1] 79). However, it neglects to mention that this period does not begin to run

until “reasonable proof’ has been provided by the claimant. MCL § 500.3 142(2). If an insurer

desires to challenge or investigate an amount charged, it can and should conduct an investigation

during the thirty day period to establish a lesser amount. See Wilhams v. AAA Michigan, 250

Mich. App. 249, 267 (2002). Indeed, “not only should an insurer audit and challenge the

reasonableness of bills submitted by health care providers, but the providers should expect no

less.” Advocacy Org. for Patients & Providers v. Auto Club Ins. Ass ’n, 257 Mich. App. 365, 378

(2003), aff’d, 472 Mich. 91 (2005); AAA Jldichigan, 250 Mich. App. at 267 (affirming imposition

of no-fault penalty interest where the insurer “could have and should have” conducted some

investigation of its own during the thirty-day legislative grace period to establish a lesser amount

of uncoordinated benefits owed). A claimant may then challenge the insurer’s failure to fully

reimburse them for medical bills. Id.

State Farm knew it had a right to request reasonable proof, and could and should have

investigated claims before payment. State Farm expressly allegesthat the pattern and similarity

of the examination reports and other records proves the existence of a "predetermined protocol."

State Farm claims that the RICO scheme began in 2007, though only identifies "RICO Events"

for which mailings occurred beginning in 2011 (Dkt. #1, Exhibits 1A-1B). State Farm's claims

should be dismissed to the extent they seek any recovery based on requests for reimbursement

prior to August 28, 2010.


State Farm Has Voluntarily Waived Any Right to Contest the

Propriety of Claims Previously Paid.

"Waiver" is defined as the intentional and voluntary relinquishment of a known right.

Moore v. Firsz‘ Security Cas. C0., 224 Mich. App. 370, 376 (1997). Waiver may be shown “by

proof of express language of agreement or inferably established by such declaration, act, and

conduct of the party against Whom it is claimed.” Angotr v. Chubb Group ofIns. C0s., 270 Mich.

App. 465, 470 (2006). As stated above, State Farm acknowledges that it has a statutory and

contractual obligation to promptly and fairly process claims (i.e. thirty days), see Dkt. #1, 1] 79,

but neglected to mention that that this period does not begin to run until “reasonable proof” has

been provided by the claimant. MCL § 500.3 142(2). If an insurer desires to challenge or

investigate an amount charged it can and should conduct an investigation during the thirty day

period to establish a lesser amount. State Farm knew it had a right to request reasonable proof,

and could and should have investigated claims before payment. Having made payment, State

Farm must be deemed to have waived any challenges as to the propriety of those claims.

Furthermore, State Farm made payment based upon the same documentation that State Farm

now claims is "not credible" and based on a "predetermined protocol."

E. State Farm's Claim for Unjust Enrichment is Predicated on the Same

Insufficient Fraud Allegations and Therefore Fails as a Matter of Law.

Unjust enrichment involves a theory of recovery under which the law will imply a

contract where a Plaintiff properly pleads that “(l) the plaintiff conferred "a benefit upon the

defendant; (2) the defendant knew of such benefit; and (3) the defendant retained the benefit

under circumstances where it would be unjust to do so without payment.” Andersons, Inc. v.

Consol, Inc., 348 F.3d 496, 501 (6th Cir. 2003).


As an initial matter, State Farm's unjust enrichment claim must be dismissed because all

of the alleged payments made to Defendants are subject to or governed by express insurance

contracts between State Farm and the insured which precludes State Farm‘s equitable claim for

unjust enrichment. Williams v. Pledged Prop. II, LLC, 508 Fed. Appx. 465, 469 (6th Cir. 2012);

Oak St. Funding, LLC v. Ingram, 749 F. Supp. 2d 568, 580 (E.D. Mich. 2010) (“A contract will

be implied only if there is no express contract covering the same subject matter.”). Because

there is an express contract between State Farm and the insured covering payment of PIP

benefits and allowable expenses (the rights to which were assigned to Defendants), State Farm

could not maintain a claim for unjust enrichment.

Even assuming arguerido that there was no express contract covering the same subj ect

matter, State Farm has failed to plead sufficient facts in support of its bare and conclusory

assertions that “Defendants have been unjustly enriched by $400,000.00” because "Defendants

knowingly submitted charges for examinations, pain-management injections, and related

procedures that were either not rendered or not medically necessary and individually tailored to

the unique needs of each patient, the circumstances are such that it would be inequitable to allow

them to retain the benefit of the monies paid." (Dkt. #1, 11 95). State Farm fails to identify which

Defendant, SSOM or Dr. Radden, received and retained which "benefits" from State Farm.

' No facts on point canbe gleaned from the face of the Complaint. Instead, State Farm

merely recites the elements of unjust enrichment in conclusory fashion. See Matthews v. Mortg.

Elec. Registration Sys., 2011 U.S. Dist. LEXIS 69501, at *23 (E.D. Mich. Apr. 5, 2011)

(dismissing Plaintiffs claim for unjust enrichment in part because the complaint pleads the

requisite elements of unjust enrichment in a conclusory fashion).


Moreover, as State Farm acknowledges, its unjust enrichment claim stems from the

alleged fraudulent activity (i.e. that Defendants were unjustly enriched because of fraud). (Dkt.

#1, 1] 95). As such, State Farm's unjust enrichment claim must meet Rule 9(b)’s pleading

requirements. Boston v. Clark, 2012 U.S. Dist. LEXIS 130496, at *20 (ED. Mich. Sept. 13,

2012). Because State Farm has failed to plead fraud with the requisite specificity, it has also

failed to state a claim for unjust enrichment.

F. State Farm's Fraud and Unjust Enrichment Claims (or portions thereof) AreTime-Barred.

The statute of limitations for common law fraud and unjust enrichment claims is sixyears

pursuant to MCL § 600.5813 which provides that “all other personal actions shall be commenced

within the period of six years after the claims accrue and not afterwards unless a different period

is stated in the statutes.” Pursuant to MCL 600.5827, a claim for common law fraud and unjust

enrichment “accrues at the time the wrong upon which the claim is based was done regardless of

the time when damage results.” Accordingly, State Farm’s common law fraud claim (Count I)

with respect to any alleged fraudulent claims that were submitted before August 28, 2008 (more

than 6 years prior to the filing of the Complaint) is barred because the claim would have accrued

at the time of the alleged fraudulent submission. Similarly, the unjust enrichment claim (Count

III) is barred with respect to amounts paid to Defendants prior to August 28, 2008, because the

claim would have accrued at the time of payment.

Therefore, on its face, State Farm’s common law fraud and unjust enrichment claims with

respect to claims submitted and!or paid before August 28, 2008, are not plausible and fail to state

a claim upon which relief can be granted.


G. State Farm’s Declaratory Judgment Claim (Count IV) is Not Proper.

Federal courts’ authority to hear declaratory judgment claims, such as State Farm’s Count

IV, is delineated in 28 USC § 220l(a) and Fed. R. Civ. P. 57. Pursuant to this statute and rule,

the federal courts are not required to exercise jurisdiction over requests for declaratory judgment

and instead have an extraordinarily large degree of discretion in deciding which declaratory

judgment actions to adjudicate. The instant case is an eminently appropriate situation for this

Court to decline to exercise jurisdiction. Wilton v. Seven Falls Co., 515 US. 277 (1995) is one

of several U.S. Supreme Court cases holding that federal courts are given substantial discretion

in deciding whether or not to exercise their declaratory reliefjurisdiction. Pursuant to Wilton,

the courts have no obligation to hear or decide particular declaratory cases. In fact, courts need

not even find extraordinary circumstances in order to abstain from rendering judgment. Sixth

Circuit cases agree. See e.g., Aetna Casualty and Sur. Co. 12. Sunshine Corp, 74 F.3d 685 (6th

Cir. 1996). '

While exercise ofjurisdiction over requested declaratory relief may not be declined on a

whim, there are numerous valid reasons to decline. In particular, the Sixth Circuit has listed five

factors to be used in determining whether or not to adjudicate a case: (1) whether the declaratory .

action would settle the controversy, (2) whether the action would serve a useful purpose by

clarifying the legal relations at issue, (3) whether the action is merely intended to advance

“procedural fencing” or “a race for res judicata,” (4) whether the action would increase friction

between state and federal courts and improperly encroach upon state jurisdiction, and (5)

whether there is a better or more effective alternative remedy. Scottsdale Ins. Co. v. Flowers,

513 F.3d 546 (6th Cir. 2008) (citing Grand Trunk W.R. R. Co.v. Consolidated Rail Corp, 746

F.2d 323 (6th Cir. 1984)).


- The first of the Scottsdale factors clearly favors declining to rule on State Farm’s

declaratory judgment claim. Whatever decisions this Court might make regarding the

reasonableness of Defendants’ insurance claims and the medical necessity of Defendants’

services, these same issues will continue to be litigated in state court. No Michigan state court is

bound to accept this Court’s judgment, especially on an issue that is so inherently bound up in

state law. To the contrary, a decision by this Court could easily end up contradicting state court

opinions and thus leaving the disputed questions farther from resolution.

For the same reasons, State FaIm’s claim fails to meet the second Scottsdale factor. Due

to the huge number of ongoing cases dealing with these same issues, a declaratory judgment by

this Court will not clarify the legal relations between State Farm and Defendants. The potential

_ for contradictory judgments will, instead, significantly muddy the water in this respect.

As for “procedural fencing,” it is apparent that State Farm is engaging in exactly the sort

of “race for res judicata” against which the Scottsdale court admonished parties. If State Farm’s

concern were simply to obtain a fair hearing for its claims, it had no need whatsoever to file this

action. The sole reason to file yet another case before this Court is to forum shop and thus gain a

procedural advantage.

Scottsdale factors #4 and #5, however, are truly decisive. Having a federal court decide

what is a reasonable charge and what is a medical necessity under Michigan law (which this

Court must necessarily do in order to adjudicate State Farm’s claims) would unavoidably create

- friction with the state, and the pending state court actions are a better alternative remedy.

Automobile insurance under the No-Fault Act is, after all, purely a state-law issue. Moreover, the

Michigan legislature deliberately left the standards for medical necessity and reasonableness

under the statute vague; they could have specified a more precise rule, but they chose not to do


so. Notably, the statute does not require treatment providers to adhere to any guidelines

established by State Farm or other insurance companies, nor does the statute require providers to

perform only the cheapest treatments for the benefit of State Fa.rm's bottom-line. Making the

determination demanded by State Farm would both undermine the Michigan legislature’s chosen

balance and go directly against the legislature’s intent. When a case involves only complicated

and factual issues of state law, and there is no suggestion that a state court could not decide the

issues fairly and impartially, federal courts should decline to issue declaratory relief. American

Home Assurance Co. v. Evans, 791 F.2d 61 (6th Cir. 1986). This Court hence should not

exercise its discretionary jurisdiction over State Farrn’s declaratory judgment claim.

IV. CONCLUSION

WHEREFORE, Defendants respectfully request that this Court enter an order dismissing

the Complaint in its entirety against them pursuant to Fed. R. Civ. P. 9(b) and Fed. R. Civ. P.

12(b)(6). I

Law Offices of Gary R. Blumberg P.C Dated: September 26, 2014

By: /s/ Gary R. BlurnbergGary R. Blumberg (P29820)


JOELSON ROSENBERG PLC I

By: /s/ Peter W. Joelson



PADILLA LAW GROUP

By: /s/ Daniel V Padilla

Daniel V. Padilla (P48634)



Exhibit 1

5:14-cv-13299-JCO-MJH Doc # 16 Filed 09/30/14 Pg 34 of 39 Pg ID 265389- 25' eiih-Hr"-i°3%9-Jco-MJH Doc # 16 Filed 09/so/14 Pg 34 of 39 Niagiilii 2653- 9

' LOUIS NATHANIEL RADDEN, D.0.Board Certified

Cuniculum Vitae

Suite A4, Farmington Hills, Michigan 48336. 0243-497-9477 or 248-921-8096

EDUCATION

1995-1999 Michigan State University College of Osteopathic MedicineMay 1999

1990-1995 Wayne State UniversityB.A. Biology 1995

FELLOWSHIP/RESIDENCY/INTERNSHIP .

2004-2005 Duke University/Duke University Medical CentersCombined Orthopedic/Neurosurgery Spine Fellowship

2000-2004 University of Medicine and Dentistry of New JerseyOrthopedic Surgery

1999-2000 BCCH/Henry Ford Health System

LICENSUREIBOARD CERTIFICATION_

New Jersey 25rnb07343400Exp: Inactive

CDS d08l34400 Inactive

North Carolina 200301513 03/14/15

Michigan 42398 12/31/15

National Board ofOsteopathic Medical Examiners Diplomat 08/06/01

American Board of Osteopathic Orthopedic Surgeons Board Certified 1 1/15/10

Michigan Board ofOsteopathic Medicine and Surgery Lie # 2303 l2I31/15

5:14-cv-13299-JCO-MJH Doc # 16 Filed 09/30/14 Pg 35 of 39 Pg ID 2663°P- 75- 2§ii‘}4-‘(iii-3i)§¥99-Jco-MJH Doc # 16 Filed 09/so/14 Pg 35 of 39 N°Pig0fi$ 26% 3

CERTIFICATIONS

2009 Cervical Spine Decompression and Stabilization Techniques

2008 Zimmers Cervical Minimally Invasive Surgery

2008 Cervical Spine Research Society '

2007 Interspinous Process Decompression

2006 Zirnmers Dynesys Non-Fusion Technology

2005 Kyphon Inflarnmable Bone Tamp

2005 Deuy Chaiite Artificial Disc Replacement

2004 Basic Cardiac Life Support

2004 Advanced Cardiac Life Support

2003 Protection ofHuman Research Participants

1999 Advanced Pediatric Support

PROFESSIONAL MEMBERSHIP

I995-Present American Osteopathic Association, Physician Member

1 995-Present

1995-Present

1995-Present Urban League

2000-Present American Academy ofOrthopedics, Physician Member

2000-Present American Osteopathic Academy of Orthopedics

2000—Present Arthroscopy Association ofNorth America

2000—Present North American Spine Society

2000-Present A0 International Spine Society

2004-Present Piedmont Orthopedic Society, Duke University

2009-Present Detroit Academy of Orthopedic Surgeons

5:14-cv-13299-JCO-MJH Doc # 16 Filed 09/30/14 Pg 36 of 39 Pg ID 267339- 25' 3.3°:i‘i41-Eli-lLls%9-Jco-MJH Doc # 16 Filed 09/so/1'4 Pg 36 of 39 N°Pd,0Ii3 26'?‘ 4

_RESEARCH

Spring 2003 Research Presentation IDavid Clements, M.D., Louis Radden, D.O., “Management of Odonoid Fractures,” ResidentsForum, UMDNI/‘University Medical Centers.

Spring 2002 Research Presentation '

John B. Catalano, M.D., Louis Radden, D.O., “Tatar Neck Fractures Operative versus Non-Operative Fixation,” Residents Forum, UMDNJ/University Medical Centers.

Spring 1998 Research Assistant

Michael Lodish, D.0., St. John Health SystemsExamination and follow—up of a patient with leiomyosarcoma.

Spring 1996 Summer Research Fellow

Steve Treianberg, Ph.D, Michigan State UniversityRetinoblastoma Diagnosis and Prognosis in Children.

Summer 1995 Summer Research Fellow

Tina Ziembe, Ph.D., Wayne State UniversityBreast Cancer Detection in Women.

PUBLICATIONS ' . '

Peter Grossi, Schahid M. Nimjee, Louis Ratlden, Ashtoush Pradhan, Robert Isaacs, “ModifiedPedicle Subtraction Osteotomy Utilization and Anterior Column Device to Correct ThoracicKyphotic Deformity: A Cadavaeric Study.” Abstract Submitted NASS 2005.

Peter Grossi, Louis Radclen, Ashtoush Pradham, Robert Isaacs, “Disc Space Preparation inTransforaminal Interhody Fusion: A Comparison of Open and Minimally Invasive Technique.”The Spine Journal Volume 6 (5) -— September 1, 2006.

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‘EXTRACURRICULAR ACTIVITIES

1995-1997 Treasurer, Association of Black Osteopathic Medical StudentsOrganized filndraisers and financial portfolio for the organization.

1997-1999 Virginia Park Clinic

Evaluated and treated uninsured patients as a medical volunteer.

1997-1999 Representative (Minority Recruitment), Michigan State UniversityCollege of Osteopathic Medicine.

Actively recruited minority high school and college students.

2002-2004 Team Physician for Camden RiversharksA minor league baseball team.

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LECTURES

Louis Radden, D.0., “Spinal Stcnosis Diagnosis and Treatment: A Cause ofDisability LowBack and Lower Extremity Pain,” 2008.

Louis Radden, D.0., “Spinal Fractures from Osteoporosis,” 2007.

Louis Radden, D.0., "Chronic Back Pain-What You Can Learn About Chronic Back Pain,”2007.

Louis Radden, D.0., “Thoracolumbar Fractures Management and Complications," ResidentsForum, Michigan State University. 2006.

Louis Radden, D.0., “Dynesys-It’s Different,” Physicians Forum, St. Joseph Mercy Hospital,Pontiac, Michigan. 2006.

Louis Radden, l).0., “Fractures and Dislocation of the Thoracolumbar Spine,” ResidentsForum, Duke University Medical Center. 2005.

Louis Radden, D.0., “Cervical Spine Injuries in Athletes,Thomas, U.S. Virgin Island. 2003.

“Vocational Experts Conference, St.


CERTIFICATE OF SERVICE

NOW COMES the undersigned and hereby states that on September ‘fig, 2014, the above

pleading and this Certificate of Service were e-filed and e-served using the ECF system which

will send notification of such filing to all counsel.

/s/ Susan Brohman

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