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Trial lawyers group: RICO claims not appropriate recourse against baseless lawsuits

By John O'Brien | Nov 30, 2014


RICHMOND, Va. (Legal Newsline) – A national association representing the interests of trial lawyers has filed a brief that argues against corporate defendants’ use of racketeering laws in lawsuits against plaintiffs attorneys alleged to have committed fraud.

On March 3, the American Association for Justice – formerly the Association of Trial Lawyers of America – filed an amicus brief in an appeal filed by attorneys Robert Peirce and Louis Raimond, two attorneys who were found by a federal jury to have conspired with a radiologist to fabricate asbestos claims filed in West Virginia.


Pursuant to the Racketeer Influenced and Corrupt Organizations Act, U.S. District Judge Frederick Stamp has tripled the damages verdict to $1.3 million.

“Legitimate litigation activities by an attorney on behalf of his or her client generally are not deemed to be acts of mail fraud for purposes of subjecting the attorney to civil liability under RICO. Indeed, the overwhelming weight of authority holds that the filing of a lawsuit, even if baseless or fraudulent, does not come within the scope of RICO,” the brief says.

“State counterparts to Federal Rule of Civil Procedure 11 and state tort remedies – including civil actions for fraud, malicious prosecution and abuse of process – provide state courts with the means to combat fraudulent claims and make whole the victims of such illicit activity.

“These are appropriate tools designed precisely for this purpose. Private parties should not be permitted to drag their state court litigation into federal court to punish the attorneys who filed personal injury suits against them.”

Peirce and Raimond – formerly of the Pittsburgh firm Peirce, Raimond & Coulter – on Oct. 3 filed a notice of appeal of a September decision by Stamp, of the Northern District of West Virginia. The appeal will be before the U.S. Court of Appeals for the Fourth Circuit in Richmond, Va.

On Dec. 20, 2012, an eight-person jury found Peirce, Raimond and radiologist Ray Harron committed racketeering, conspiracy and fraud and ordered them jointly and severally liable for a penalty of $429,240.27.

CSX’s original complaint, filed in 2005, said Peirce’s firm hid nine fraudulent claims among other lawsuits filed by the law firm in West Virginia.

The nine lawsuits were filed and settled from 2000-2006. Stamp granted summary judgment to the Peirce firm in 2009, ruling a four-year statute of limitations began when the Peirce firm began targeting CSX.

However, the Fourth Circuit overturned that decision and gave new life to the lawsuit. The U.S. Supreme Court declined to hear the defendants’ appeal of the decision.

CSX amended its complaint to include two additional claims it said were fraudulent. The Peirce firm filed counterclaims against the company that said it was engaging in fraud by bringing and conducting the lawsuit, though the jury ruled for CSX on them.

According to the appeal notice, the two attorneys are appealing Stamp’s September amended judgment, which included his tripling of the damages awarded by a jury and his denial of the defendants’ motion for judgment as a matter of law or in the alternative for a new trial.

RICO liability should not be imposed on those who simply filed personal injury lawsuits, the AAJ brief says.

“(E)xpanding RICO for use to combat baseless state court lawsuits is unnecessary in view of the more appropriate and effective tools available to state courts,” the brief says.

“Instead, RICO will lure corporate defendants to the federal courthouse to lay their state court problems at the feet of federal judges in hopes of winning treble damages and attorneys fees.

“Most importantly, the risk that a federal court might impose crippling RICO penalties on attorneys for injury victims at the behest of their party-opponents exacts too high a cost for all Americans.

“The harsh penalties designed to deter organized crime would, in the hands of private litigants, become weapons to punish their adversaries and deter attorneys in the future from zealously representing wrongfully injured victims.”

In 2005, federal court judge Janis Graham Jack made national headlines when she uncovered duplicate and fraudulent silica diagnoses in her Texas courtroom. Many of those diagnoses were made by Harron and were made on plaintiffs who had already brought asbestos claims.

In Jack’s opinion dismissing the claims, she said “These diagnoses were driven by neither health nor justice – they were manufactured for money.”

Following Harron’s admission that he did not even make the diagnoses of the patients whose X-rays he read, Jack noted that most of “these diagnoses are more the creation of lawyers than doctors.”

The defendants had also requested that if the verdict was allowed to stand, then the amount should be reduced to $95,368.98 because CSX should not be able to recover any damages on RICO claims that post-dated July 5, 2007. Stamp denied that request.

Stamp did not make a ruling on the most expensive motion – CSX’s request that the defendants pay its more than $10 million legal bill.

Stamp decided to postpone any decision on the motion until exhaustion of any appeal.

From Legal Newsline: Reach editor John O’Brien at

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Organizations in this Story

American Association for Justice