The Best Defense?

The Serpent and the Scales

Larger companies defending high-volume plaintiff lawsuits are fighting back by countersuing the plaintiffs under the RICO statute, claiming abuse of the litigation process. In a recent example, health care insurer Blue Cross Blue Shield of Georgia is using the strategy to counter health care providers’ pursuit of arbitration claims under the No Surprises Act (NSA). Whether it will work may depend on a First Amendment principle called the Noerr-Pennington doctrine.

The NSA says that when patients receive emergency services from providers (emergency doctors, air ambulances, etc.) who are not in their insurer’s network, they cannot be “balance billed” for amounts not covered under their insurance plan. Those amounts have to be covered by the insurer, or written off by the provider, or a bit of both. If the insurer and provider can’t agree on the amount, the NSA requires them to resolve the dispute through an Independent Dispute Resolution (IDR) body—a kind of arbitration run by a third-party service.

The system has been controversial. Providers have been very successful in IDR proceedings, winning most of the time and sometimes getting awarded large amounts. Insurers have criticized the process as flawed and subject to abuse by providers filing masses of claims at once, many of them somehow invalid. In the recent Georgia case, BCBS claims that providers are flooding the arbitrators with claims that were for patients who did not qualify, or for heavily inflated charges, and that this amounts to federal fraud and racketeering.

Under the Noerr-Pennington doctrine, someone who brings a lawsuit in court generally can’t be counter-sued just for bringing the lawsuit in the first place, even if the original lawsuit fails. The idea is that the First Amendment protects the right to “petition” the government—including the courts—for redress. There is an exception for “sham” lawsuits, but it is hard to meet.

What about cases brought not in regular courts, but before separate bodies like the IDR panels? They are a bit like private arbitrators in contract disputes, where Noerr-Pennington doesn’t apply. But because they are required by statute and overseen by federal agencies (HHS, Treasury, DOL), they are also a bit like agency administrative proceedings, which are covered by Noerr-Pennington.

So far, the courts have not worked out whether Noerr-Pennington applies in this situation. But in other cases, most recently a 2023 decision by the Sixth Circuit, courts have held that the doctrine covers the actions of private organizations that provide industry certifications, which government agencies then rely on in regulating businesses. Because the IDR system is overseen by federal agencies, who are empowered to enforce the results of IDR decisions, there may be an argument that Noerr-Pennington is implicated.

BCBS filed its RICO lawsuit in May 2025. The providers’ response is due this week (August 29), so we will see whether and how they argue Noerr-Pennington as a defense. And eventually, the case may indicate whether insurers can use RICO as a weapon in the ongoing NSA war.