Duane Morris Class Action Review - 2023 - Report - Page 298
selling, and distributing Neuro-Stim System (Neuro-Stim), used exclusive-rights salesagent distributors (Sales Agents) who misrepresented the device as “FDA-approved.”
Id. at *4. The plaintiffs contended that they would not have purchased the devices
without relying on the fraudulent misrepresentations. The defendants argued that the
plaintiffs lacked standing to pursue these claims because the undisputed material facts
show that the plaintiffs did not: (i) purchase the Neuro-Stim devices at issue in this case;
(ii) submit bills to Medicare seeking payment for services related to the use of these
Neuro-Stim devices; (iii) receive payment from Medicare; or (iv) have any payments
withheld by Medicare. Id. at *11. The plaintiffs alleged that they may be personally liable
to the Medicare program for certain overpayments related to the billing of services
involving the Neuro-Stim devices. The court held that the undisputed material facts
showed that the plaintiffs lacked standing to pursue their claims, because they neither
purchased, nor submitted billings for, the Neuro-Stim devices. The court determined
that the plaintiffs thereby failed adequately allege a RICO injury sufficient to confer
standing. For these reasons, the court granted the defendants’ motion for summary
judgment.
In Ward, et al. v. Crow Vote LLC, 2022 U.S. Dist. LEXIS 195396 (C.D. Cal. Oct. 7,
2022), the plaintiffs, a group of chef-competitors on the defendant’s Favorite Chef
Competition (the Competition) filed a class action alleging that the voting system in the
Competition constituted an “illegal gambling business” in violation of the RICO. The
winner of the Competition was determined by the number of “votes” from members of
the public. Id. at *40. The parties disputed whether the contest was designed to make it
unlikely or impossible that a chef-competitor could win without paid voting. Id. at *42.
The defendant filed a motion for summary judgment on the grounds that the
Competition was not illegal gambling. The court concluded that the contest was not
illegal gambling. The court ruled that the defendants met their initial burden by
demonstrating there was an absence of evidence of injury to the plaintiffs’ business or
property. The court stated that the plaintiffs’ motive behind the purchase of the votes did
not change the undisputed facts showing that the plaintiffs received what they
bargained for, i.e., votes for money, resulting in there being no triable issue as to injury
to the plaintiffs’ business or property in violation of the RICO. Id. at *53. Accordingly, the
court granted the defendants’ motion for summary judgment.
D.
Rulings Denying Class Certification
One court denied class certification in 2022 outright in a RICO class action.
In Wacker Drive Executive Suites, LLC, et al. v. Jones Lang LaSalle Americas (Ill.), LP,
2022 U.S. Dist. LEXIS 64684 (N.D. Ill. Apr. 7, 2022), the plaintiffs filed a RICO class
action arising from an alleged conspiracy between a building manager and two labor
unions to force tenants to hire union-only movers and contractors. Id. at *1. The
plaintiffs filed a motion for class certification pursuant to Rule 23, and the court denied
the motion. The court determined that the plaintiffs failed to provide significant proof of
the central common issues, namely those relating to the existence of the required
agreements/conspiracies between the building manager and the labor unions and the
existence of an enterprise under the RICO as to all the buildings at issue in the class
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Duane Morris Class Action Review – 2023
