On Thursday, May 2, 2024, U.S. District Court Judge Nancy L. Maldonado ruled that Plaintiffs in Havrilla v. Centene Corp. (N.D. Ill.) could proceed on the majority of their claims against Centene Corporation and two of its subsidiaries, Centene Management Company, LLC, and Celtic Insurance Company.
Plaintiffs allege in their complaint that Centene Corporation—the largest provider of health-insurance plans sold on the online exchanges established by the Affordable Care Act (ACA)—and its subsidiaries engaged in a multi-billion-dollar scheme to defraud consumers, taxpayers, and government entities across 26 states through the company’s “Ambetter” brand health-insurance plans in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO) and numerous state laws. They also seek to certify the lawsuit as a class action.
As noted in the judge’s opinion, the core of the lawsuit is Plaintiffs’ allegation “that Defendants mislead consumers by publishing provider directories that are not up to date and misrepresent the benefits that members will receive when they purchase the insurance plan.” This means that those (primarily low‑income) consumers who purchase Ambetter health insurance “run into difficulty finding healthcare providers who actually accept the insurance—including providers that are listed on the Ambetter plans’ websites and provider directories.”
Defendants had moved to dismiss the complaint on grounds of lack of subject-matter jurisdiction and failure to state a claim. Judge Maldonado rejected the bulk of Defendants’ arguments, concluding:
Plaintiffs have pled sufficient facts to allege a RICO conspiracy to commit mail and wire fraud and have adequately established standing to bring claims on behalf of putative class members who reside in states where no named Plaintiff resides. Further, Plaintiffs have stated a claim for relief under each of the state consumer protection acts alleged in the Complaint apart from Nebraska.
Relying in part on the Seventh Circuit’s decision in Fitzgerald v. Chrysler Corp., 116 F.3d 225 (7th Cir. 1997), Judge Maldonado found that “Plaintiffs’ allegations are close to the ‘prototypical RICO case’ outlined by the Seventh Circuit” because “Plaintiffs have alleged that Centene Corp. has used the ‘resources, contacts, facilities, and appearance of legitimacy’ of its subsidiaries to perpetrate a fraud in a manner it could not have done without channeling its activities through the [RICO] enterprise.”
Judge Maldonado also rejected Defendants’ argument that Plaintiffs’ allegations lacked the “particularity and specificity” required to plead the predicate acts of mail and wire fraud. Defendants’ argument failed, the judge explained, because “Plaintiffs identify the ‘who’ of the alleged fraud—Defendants and at least 26 other Centene Corp. subsidiaries—and outline each Defendants’ role in the Ambetter enterprise.”
The only two claims dismissed by the judge were Plaintiffs’ claim of unjust enrichment and their claim under the Nebraska Consumer Protection Act.
With the remainder of Defendants’ motion to dismiss having been denied, Plaintiffs can now move forward on their federal RICO claim as well as their claims under 11 states’ consumer-protection statutes.