United States District Court, D. New Jersey
Citizens United Reciprocal Exchange ("CURE"), an
insurance reciprocal, alleges that defendants Joel Meer, Joel
Meer, P.C., and Evaluation and Testing Associates, P.C.
submitted, and caused to be submitted, hundreds of fraudulent
claims. CURE seeks to recover $144, 000.00 that it paid to
defendants and seeks a declaratory judgment that it does not
have to pay defendants' pending claims, which are alleged
to be in excess of $16, 100.00. CURE asserts eight counts,
including for unjust enrichment, common law fraud, violations
of the Racketeer Influenced and Corrupt Organizations Act,
and violations of the New Jersey Insurance Fraud Prevention
Citizens United Reciprocal Exchange ("CURE") is an
insurance reciprocal authorized to conduct business and issue
automobile insurance policies in New Jersey. (Compl. ¶
9). Defendant Joel Meer ("Meer") resides in New
Jersey. (Compl. ¶ 10). Defendant Joel Meer, P.C.
("Meer, P.C") is a medical professional corporation
incorporated in New Jersey with its principal place of
business in New Jersey. (Compl. ¶ 11). Defendant
Evaluation & Testing Associates, P.C. ("ETA")
is a medical professional corporation incorporated in New
Jersey with its principal place of business in New Jersey.
(Compl. ¶ 12). ETA was a New Jersey general business
corporation from June 22, 2011 to March 1, 2013. (Compl
¶ 13). Meer owns both Meer, P.C. and ETA. (Compl.
New Jersey law, automobile insurance policies provide
benefits for personal injuries sustained in an accident
involving the covered automobile, regardless of whether the
driver was at fault for the accident. (Compl. ¶¶
23-24). This coverage is called "personal injury
protection, " or "PIP." (Compl. ¶¶
23-24). When insureds receive treatment, they can assign
their right to PIP benefits to medical providers, who can
then seek reimbursement from the insurance companies. (Compl.
¶¶ 24). Defendants are such medical providers,
i.e., assignees of their patients' PIP benefits.
alleges that defendants Meer, Meer, P.C, and ETA submitted,
and caused to be submitted, hundreds of fraudulent no-fault
insurance charges for services, including medically
unnecessary, illusory, or otherwise non-reimbursable
examinations, electrodiagnostic testing, and physical
therapy. (Compl. ¶ 1). These services were claimed to
have been provided to Insureds involved in automobile
accidents who were eligible for coverage under no-fault
insurance policies issued by CURE. (Compl. ¶ 2).
alleges that its payments to defendants were fraudulently
obtained for several reasons. First, defendants allegedly
billed for medically unnecessary treatments or treatments
that did not occur. (Compl. ¶ 3). Extensive services
were allegedly provided to Insureds who had only minor
accidents. (Compl. ¶¶ 3, 65-70). In those cases,
defendants followed pre-determined protocols that invented
diagnoses and billed for medically unnecessary treatments to
maximize billing. (Compl. ¶¶ 65-132). In many cases
the billing codes for services misrepresented and exaggerated
the level of service provided. (Compl. ¶3).
defendants were allegedly not in compliance with the relevant
New Jersey laws and regulations and therefore were not
eligible to receive no-fault insurance reimbursements at all.
(Compl. ¶ 3). ETA engaged in the practice of medicine
while it was a non-professional general business corporation;
in New Jersey, only professional medical corporations can
engage in the practice of medicine. (Compl. ¶¶
although New Jersey prohibits the practice, defendants
allegedly gave patient referrals to chiropractors and
chiropractic professional corporations (the
"Chiropractic Referral Sources") in exchange for
"return referrals." (Compl. ¶¶ 80-104).
seeks to recover more than $144, 000.00 that it paid in
reliance on defendants' allegedly fraudulent billing.
(Compl. ¶ 8). CURE also seeks a declaratory judgment
that it does not have to pay defendants' pending claims,
which are alleged to be in excess of $16, 100.00. (Compl.
asserts eight causes of action against defendants:
■ Count 1 seeks a declaratory judgment that Meer, P.C.
and ETA have no right to receive payment for any pending
bills submitted to CURE. (Compl. ¶¶ 322-29)
■ Count 2 alleges, against all defendants, violations
of the New Jersey Insurance Fraud Prevention Act
("NJIFPA"), N.J. Stat. § 17:33A-1, et
seq. (Compl. ¶¶ 330-32)
■ Count 3 alleges, against Meer, a violation of the
federal Racketeer Influenced and Corrupt Organizations Act
("RICO"), 18 U.S.C. § 1962(c) (Compl.
■ Count 4 alleges, against Meer and Meer, P.C., common
law fraud (Compl. ¶¶ 341-47)
■ Count 5 alleges, against Meer and Meer, P.C., unjust
enrichment (Compl. ¶¶ 348-53)
■ Count 6 alleges, against Meer and ETA, a violation of
RICO, 18 U.S.C. ¶ 1962(c) (Compl. ¶¶ 354-61)
■ Count 7 alleges, against Meer and ETA, common law
fraud (Compl. ¶¶ 362-68)
■ Count 8 alleges, against Meer and ETA, unjust
enrichment (Compl. ¶¶ 369-74)
response to CURE'S allegations, defendants have moved to
dismiss the complaint pursuant to Rule 12(b)(1) and Rule
12(b)(6), as well as for lack of particularity pursuant to
Rule 9(b). (ECF No. 10). Plaintiffs oppose this motion to
dismiss. (ECF No. 13).
to dismiss for lack of subject matter jurisdiction pursuant
to Federal Rule of Civil Procedure 12(b)(1) may be raised at
any time. Iwanowa v. Ford Motor Co., 67 F.Supp.2d
424, 437-38 (D.N.J. 1999). "(B]ecause subject matter
jurisdiction is non-waivable, courts have an independent
obligation to satisfy themselves of jurisdiction if it is in
doubt. See ML Healthy City Sch. Dist. Bd. of Educ. v.
Doyle, 429 U.S. 274, 278, 97 S.Ct. 568, 50 L.Ed.2d 471
(1977). A necessary corollary is that the court can raise sua
sponte subject-matter jurisdiction concerns." Nesbit
v. Gears Unlimited, Inc., 347 F.3d 72, 76-77 (3d Cir.
12(b)(1) challenges may be either facial or factual attacks.
See 2 Moore's Federal Practice § 12.30(4]
(3d ed. 2007); Mortensen v. First Fed. Sav. &
LoanAss'n, 549 F.2d 884, 891 (3d Cir. 1977). A
facial challenge asserts that the complaint does not allege
sufficient grounds to establish subject matter jurisdiction.
Iwanowa, 67 F.Supp.2d at 438. A court considering
such a facial challenge assumes that the allegations in the
complaint are true. Cardio-Med. Assoc, Ltd. v.
Crozer-Chester Med. Ctr., 721 F.2d 68, 75 (3d Cir.
1983); Iwanowa, 67 F.Supp.2d at 438. A factual
attack, on the other hand, permits the Court to consider
evidence extrinsic to the pleadings. Gould Elecs. Inc. v.
United States, 220 F.3d 169, 178 (3d Cir. 2000),
holding modified on other grounds by Simon v. United
States, 341 F.3d 193 (3d Cir. 2003). Thus "Rule
12(b)(1) does not provide plaintiffs the procedural
safeguards of Rule 12(b)(6), such as assuming the truth of
the plaintiffs allegations." CNA v. United
States, 535 F.3d 132, 144 (3d Cir. 2008).
The burden of establishing federal jurisdiction rests with
the party asserting its existence, [citing
DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 342 n.
3 (2006).] "Challenges to subject matter jurisdiction
under Rule 12(b)(1) may be facial or factual." [citing
Common Cause of Pa. v. Pennsylvania, 558 F.3d 249,
257 (3d Cir. 2009) (quoting Taliaferro v. Darby Twp.
Zoning Bd., 458 F.3d 181, 188 (3d Cir. 2006)).] A facial
attack "concerns 'an alleged pleading
deficiency' whereas a factual attack concerns 'the
actual failure of [a plaintiffs] claims to comport
[factually] with the jurisdictional prerequisites.™
[citing CNA v. United States, 535 F.3d 132, 139 (3d
Cir. 2008) (alterations in original) (quoting United
States ex rel Atkinson v. Pa. Shipbuilding Co., 473 F.3d
506, 514 (3d Cir.2007)).]
"In reviewing a facial attack, the court must only
consider the allegations of the complaint and documents
referenced therein and attached thereto, in the light most
favorable to the plaintiff." [citing Gould Elecs.
Inc. v. United States, 220 F.3d 169, 176 (3d Cir.
2000).] By contrast, in reviewing a factual attack, "the
court must permit the plaintiff to respond with rebuttal
evidence in support of jurisdiction, and the court then
decides the jurisdictional issue by weighing the evidence. If
there is a dispute of a material fact, the court must conduct
a plenary hearing on the contested issues prior to
determining jurisdiction." [citing McCann v. Newman
Irrevocable Trust, 458 F.3d 281, 290 (3d Cir. 2006)
Lincoln Ben. Life Co. v. AEILife, LLC, 800 F.3d 99,
105 (3d Cir. 2015) (footnotes omitted; case citations
originally in footnotes are inserted in text).
Rule of Civil Procedure 12(b)(6) provides for the dismissal
of a complaint, in whole or in part, if it fails to state a
claim upon which relief can be granted. The defendant, as the
moving party, bears the burden of showing that no claim has
been stated. Animal Sci. Prods., Inc. v. China Minmetals
Corp., 654 F.3d 462, 469 n.9 (3d Cir. 2011). For the
purposes of a motion to dismiss, the facts alleged in the
complaint are accepted as true and all reasonable inferences
are drawn in favor of the plaintiff. New Jersey
Carpenters & the Trs. Thereof v. Tishman Constr. Corp. of
New Jersey, 760 F.3d 297, 302 (3d Cir. 2014).
Rule of Procedure 8(a) does not require that a complaint
contain detailed factual allegations. Nevertheless, "a
plaintiffs obligation to provide the 'grounds' of his
'entitlement to relief requires more than labels and
conclusions, and a formulaic recitation of the elements of a
cause of action will not do." BellAtl Corp. v.
Twombly, 550 U.S. 544, 555 (2007). Thus, the
complaint's factual allegations must be sufficient to
raise a plaintiffs right to relief above a speculative level,
so that a claim is "plausible on its face."
Id. at 570; see also West Run Student Hous.
Assocs., LLC v. Huntington Nat'l Bank, 712 F.3d 165,
169 (3d Cir. 2013). That facial-plausibility standard is met
"when the plaintiff pleads factual content that allows
the court to draw the reasonable inference that the defendant
is liable for the misconduct alleged." Ashcroft v.
Iqbal, 556 U.S. 662, 678 (2009) (citing
Twombly, 550 U.S. at 556). While "(t]he
plausibility standard is not akin to a 'probability
requirement'... it asks for more than a sheer
possibility." Iqbal, 556 U.S. at 678.
claims of fraud, Federal Rule of Civil Procedure 9(b) imposes
a heightened pleading requirement, over and above that of
Rule 8(a). Specifically, it requires that "[i]n alleging
fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake."
Fed.R.Civ.P. 9(b). "Malice, intent, knowledge, and other
conditions of a person's mind, " however, "may
be alleged generally." Id., That heightened
pleading standard requires the plaintiff to "state the
circumstances of the alleged fraud with sufficient
particularity to place the defendant on notice of the precise