On June 28, 2021, the Fourth District Court of Appeal issued an opinion in the case of People ex rel. Allstate Ins. Co. v. Sonny Rubin et al. (2021) 66 Cal.App.5th 493 in which it held that medical reports and billing statements prepared in support of insurance claims did not constitute constitutionally protected activity entitled to the protection of California’s anti-SLAPP statute (Code of Civil Procedure section 425.16).
According to the published opinion, Allstate brought a qui tam action1 under California Insurance Code section 1871.7 based on allegations of fraudulent conduct by defendant Sonny Rubin, M.D., alleging that Dr. Rubin prepared false, fraudulent or misleading medical reports and bills that were presented to the carrier in support of claims.
Rubin sought dismissal under the anti-SLAPP statute. SLAPP stands for Strategic Lawsuits Against Public Participation. Under section 425.16, any cause of action against a person arising from any act in furtherance of a person’s right of petition or of free speech is subject to an anti-SLAPP motion, which if granted dismisses the complaint. In the context of the Rubin case, pre-litigation communications may fall under constitutional protection, but only if the communications are related to litigation that is contemplated in good faith and under serious consideration. Rubin claimed that his medical reports and bills were prepared with the intent that they be used by plaintiff attorneys in litigated claims.
As the opinion explains, Rubin treated his patients on a lien basis, authorizing the patients’ attorneys to pay for Rubin’s services from any “settlement, judgement, or verdicts.” To support his position vis-à-vis the anti-SLAPP motion, Rubin declared under oath that he understood his lien patients were pursuing personal-injury claims, that attorneys represented them for that purpose, and that those attorneys would use Rubin’s reports and bills in their personal injury cases.
Judge William D. Claster of the Orange County Superior Court denied Rubin’s anti-SLAPP motion, and Rubin appealed.
The Fourth Appellate District agreed with the trial court’s “cogent analysis” that Rubin failed to establish that he and the other providers prepared the medical reports and billing statements in serious anticipation of litigation. The appellate court adopted the trial court’s three-part analysis: First, Rubin’s liens acknowledged the theoretical possibility of litigation because they authorized the collection of patient fees from any pre- or post-litigation settlement, and stated that payment for medical services is the responsibility of the patient regardless of the outcome of their claim. Second, Rubin’s subjective understanding did not confirm that his bills and reports were protected pre-litigation conduct. Finally, Rubin failed to show that the providers prepared the medical reports and bills outside the regular course of business, as physicians routinely prepare those types of records. The possibility of litigation if negotiations failed or the insurance company denied payment was too remote to protect the defendants’ reports and bills under the anti-SLAPP statute.
The Rubin decision expanded existing law addressing protected pre-litigation activity in the context of insurance claims. Before Rubin, existing law2 only analyzed the anti-SLAPP statute in the context of first-party claims (i.e., a policyholder’s suit against their own insurer). Rubin argued that precedent only applied to first-party claims, not third-party claims. Carriers filing actions against fraudulent providers in the context of third-party claims were often faced with expensive and time-consuming anti-SLAPP motions in which defendants claimed that existing case law only addressed first party claims. Justice Eileen C. Moore dispensed with that distinction by stating, “Here, it does not matter if Rubin’s lien patients were submitting insurance claims with Allstate based on their own coverage policies (first party claims), or if they were submitting insurance claims based on the liability policies of alleged tortfeasors (third party claims). In either case, Rubin failed to establish—as a matter of law—that the subject medical reports and bills were prepared outside of Rubin’s usual course of business, and that his lien patients’ litigation with Allstate was more than a “‘possibility.’”
Thus, the ability of insurers to file affirmative actions against alleged fraudulent health care providers is significantly enhanced by the Rubin decision.
1 People ex rel. Allstate Ins. Co., et al. v. Rubin, et al., Orange County Superior Court, No. 30-2019-01101013-CU-FR-CJC.
2 People ex rel. Fire Ins. Exhange v. Anapol (2012) 211 Cal.App.4th 809.