1. To the extent that Defendants move for summary judgment

on the grounds that “[t]he facts completely destroy the

possibility of a single conspiracy among all Defendants as

alleged by Plaintiffs,” their motion will be denied. (Defs.’

Mot. for Summ. J. at 22, doc. no. 406.) Defendants argue that

the individual defendants “Drs. Lincow, Mintz, Forman, Butow and

Hennessy cannot have conspired with 7622 Medical Center or among

themselves for the purposes of RICO because they were all

employees of 7622 Medical Center” and that these Defendants could

not have conspired with “Allied Medical Group or 1900 S.G.

Associates” because these were not separate entities but rather

“merely registered fictitious names of 7622 Medical Center.” 

(Id. at 21-22 (relying on Pioneer Contracting, Inc. v. Eastern

Exterior Wall Sys., Inc., No. Civ.A. 04CV01437, 2005 WL 747221,

at *1 (E.D. Pa. Mar. 29, 2005) (noting that a “conspiracy cannot

lie against the corporation for the actions of its employees who

violate RICO on its behalf. Moreover, employees of a

corporation, while acting in the course and scope of their

employment, cannot conspire with each other”).)) Defendants make

similar arguments regarding Mr. Hirsch’s relationship to Ogontz

Pharmacy and Dr. Lincow’s relationship to Medical Management

Consulting, Inc., Allied Medical Group, P.C. and Jeffron X-Ray,

Inc. Further, Defendants urge the Court to find that “a parent

and a wholly owned subsidiary corporation, or two wholly owned

subsidiary corporations, are . . . legally incapable of

conspiring for the purposes of RICO,” although Defendants

acknowledge that the law in this area is “[l]ess clear.” (Defs.’

Mot. for Summ. J. at 20, doc. no. 406.)

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

STATE FARM MUTUAL AUTOMOBILE : CIVIL ACTION

INSURANCE CO. et al., : NO. 05-5368

:

Plaintiffs, :

:

v. :

:

ARNOLD LINCOW et al., :

:

Defendants. :

O R D E R

AND NOW, this 6th day of February, 2009, it is hereby

ORDERED that Defendants’ motion for summary judgment (doc. no.

406) is DENIED.

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Viewing the evidence in the light most favorable to

Plaintiffs, the convoluted employment relationships of the

individual and corporate Defendants demonstrate only that “a few

Defendants are employees of one corporation only and a few are

not employees at all.” (Pls.’ Resp. to Defs.’ Mot. for Summ. J.

at 20, doc. no. 435.) During oral argument, defense counsel

initially argued that “Dr. Lincow, Dr. Forman, Dr. Mintz, Dr.

Butow, Dr. Hennessy, all the individuals, they were all employees

of 7622 Medical” but later acknowledged that “Okay, possibly one

of them was a contractor . . . .” (7/14/08 Hr’g Tr. 39:22-25.) 

Plaintiffs’ counsel argued that “Dr. Lincow is not a employee of

7622 Medical Center. Dr. Lincow is allegedly an employee of

Medical Management Consulting, Incorporated” and that other

defendants “are employed by different corporations” and may or

may not be independent contractors. (Id. 47:2-8; 47:20-21.) At

this stage of the litigation, the issue of which corporate entity

employed which individual defendant is one that is appropriate

for a jury.

To the extent that Defendants move for summary judgment

on the grounds that “Defendants and the alleged ‘enterprise’ are

identical,” their motion will be denied. (Defs.’ Mot. for Summ.

J. at 23, doc. no. 406.) “[T]o establish liability under [18

U.S.C. ] § 1962(c) one must allege and prove the existence of two

separate entities: (1) a ‘person’; and (2) an ‘enterprise’ that

is not simply the same ‘person’ referred to by a different name.” 

Cedric Kushner Promotions Ltd. v. King, 533 U.S. 158, 161 (2001);

see also id. at 165 (noting that “the statute requires no more

than the formal legal distinction between ‘person’ and

‘enterprise’ (namely incorporation)”). Defendants argue that

Plaintiffs’ allegations fail to satisfy the distinctiveness

requirement of § 1962(c) because “Plaintiffs have alleged nothing

more than an enterprise consisting of the defendants ‘associated

in fact.’” (Defs.’ Mot. for Summ. J. at 25, doc. no. 406). In

support of this argument, Defendants rely primarily on

Healthguard of Lancaster, Inc. v. Gartenberg, in which Judge

Baylson held that plaintiff’s RICO claim, alleging “an enterprise

identical to Defendants” did not aver distinctiveness adequately. 

No. 2004 WL 632722, at *7 (E.D. Pa. Mar. 5, 2004); see also

7/14/08 Hr’g Tr. 37:15-18.

In response, Plaintiffs argue that “the existence of an

enterprise consisting of the association-in-fact of all of the

named Defendants is proper because . . . the courts have held

that even a complete overlap between the defendant persons and

members of an association-in-fact enterprise does not defeat the

distinctiveness requirement.” (Pls.’ Resp. to Defs.’ Mot. for

Summ. J. at 24, doc. no. 435.) In support of this argument,

Plaintiffs rely primarily on the Third Circuit’s decision in

Jaguar Cars, Inc. v. Royal Oaks Motor Car Co., Inc. and Judge

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Tucker’s decision in State Farm Mut. Auto. Ins. Co. v. Midtown

Med. Ctr., Inc., both of which considered the distinctiveness

requirement of § 1962(c). See Jaguar Cars, Inc., 46 F.3d 258,

268 (3d Cir. 1995) (“[A] viable § 1962(c) action requires a claim

against defendant ‘persons’ acting through a distinct

‘enterprise.’ But alleging conduct by officers or employees who

operate or manage a corporate enterprise satisfies this

requirement.”); Midtown Med. Ctr., Inc., No. 02-7389, 2005 WL

627969, at *4-5 (E.D. Pa. Mar. 14, 2005) (“A complete overlap

between Defendant persons and the members of an association-infact enterprise does not defeat the distinctiveness

requirement.”); see also Perlberger v. Perlberger, No. Civ. A.

97-4105, 1999 WL 79503, at *2 (E.D. Pa. Feb. 12, 1999)

(“Consistent with the Court’s previous ruling on the

distinctiveness requirement, a complete overlap between the

defendant persons and the members of an association-in-fact

enterprise does not defeat the distinctiveness requirement.”) 

In considering these arguments, the Court acknowledges

that there is substantial confusion in this circuit (and in

others) about whether a complete overlap between the enterprise

and the defendants is fatal to a RICO claim. See generally

Laurence A. Steckman, Rico Section 1962(c) Enterprises and the

Present Status of the “Distinctness Requirement” in the Second,

Third and Seventh Circuits, 21 Touro L. Rev. 1083, 1243-45 (2006)

(“Overlap issues are treated inconsistently in the Third Circuit,

with different judges taking the following positions: (a) total

overlap between the person and enterprise is not permissible; (b)

total overlap is permissible; (c) no overlap is permissible; and

(d) some overlap is permissible.”). Viewing the evidence in the

light most favorable to Plaintiffs, however, Defendants have not

met their burden. While the parties’ papers have focused on the

named Defendants, the Court notes that Plaintiffs have

consistently maintained that “the enterprise also includes

unnamed co-conspirators including patients and personal injury

attorneys as well as employees and independent contractors of

Defendants.” (Pls.’ Resp. to Defs.’ Mot. for Summ. J. at 24,

doc. no. 435; Pls.’ RICO Case Statement, doc. no. 47; Second

Amended Compl. ¶ 91, doc. no. 206.) Given the complexity of the

employment and incorporation relationships discussed above, the

Court cannot foreclose the possibility that the alleged

“association-in-fact” included unnamed co-conspirators. Thus,

under either “overlap analysis,” Defendants are not entitled to

summary judgment on Plaintiffs’ RICO claim. 

Defendants motion for summary judgment will also be

denied to the extent that it is based on the arguments that, at

all relevant times, “Mr. Hirsch was cooperating with the

government’s investigation of 7622 Medical Center and Dr. Lincow

. . . [a]s such, he could not as a matter of law conspire to

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commit fraud because he lacked the necessary mens rea” or “there

is no evidence that [Mr. Hirsch] knowingly made any false

statement to Plaintiffs with the intent to defraud.” (Defs.’

Mot. for Summ. J. at 26 & 30, doc. no. 406.) In support of these

claims, Defendants rely only on Mr. Hirsch’s verified statement,

and on those of his co-defendants. (See generally Defs.’ Mot.

for Summ. J. at Exs. 1 & 5, doc. no. 406; Defs.’ Reply to Pls.’

Resp. to Defs.’ Mot. for Summ. J., doc. no. 443.) In opposition,

Plaintiffs have relied on multiple documents, including rent

checks from Dr. Lincow’s other tenants, bills of Ogontz Pharmacy,

and the expert report of Jacqueline Hillgrube to argue that a

reasonable jury may find that “a kickback arrangement between the

Defendants [existed], that Defendant Hirsch participated in a

conspiracy to commit fraud with the Defendants, [and] violated

the insurance fraud statute and the RICO statute.” (Pls.’ Resp.

to Defs.’ Mot. for Summ. J. at 29, Exs. F, G & I, doc. no. 435.) 

Viewing the evidence in the light most favorable to Plaintiffs, a

genuine issue of material fact exists with respect to Mr.

Hirsch’s involvement, if any, in the alleged conspiracy. 

Moreover, the Court notes that Plaintiffs have presented

sufficient evidence in support of their argument that the

admission or exclusion of Jacqueline Hillgrube’s report would not

impact the Court’s conclusion regarding summary judgment. (See

12/30/08 Order, doc. no. 499 (scheduling Daubert hearing

regarding Jacqueline Hillgrube’s report)).

To the extent that Defendants move for summary judgment

on the grounds that there is no evidence that Drs. Lincow, Mintz,

Forman, Butow and Hennessey “knowingly made any false statements

to Plaintiffs with the intent to defraud,” their motion will be

denied. (Defs.’ Mot. for Summ. J. at 33-40, doc. no. 406.) 

Again, the Court notes that Defendants rely only on their own

verified statements for support, whereas Plaintiffs have

submitted the expert report of Dr. Gregory Mullford, the

deposition testimony of Defendants’ patient, Doris Carter, and

the deposition testimony of Dr. Mintz, who admitted to allowing

Dr. Forman to use his prescription pad to prescribe medicine. 

(Pls.’ Resp. to Defs.’ Mot. for Summ. J., Exs. B, J, K, O, doc.

no. 435.) Moreover, during oral argument, defense counsel

admitted that “[t]here is some evidence of altered medical

reports”. (7/14/08 Hr’g Tr. 41:18-21.) This fact, combined with

other record evidence, is sufficient to overcome Defendants’

motion for summary judgment.

Finally, to the extent that Defendants move for summary

judgment on the grounds that Plaintiffs’ payment to third-party

claimants of $1,245,625 and their expenditure of $1,024,690 in

legal defense costs is “irrelevant,” their motion will be denied. 

(Defs.’ Mot. for Summ. J. at 40 & 49, doc. no. 406.) The Court

notes that the composition of Plaintiffs’ damages, if any, is

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more appropriately decided during trial, rather than in the

context of a motion for summary judgment. To the extent this

issue remains relevant during trial, the Court will entertain

argument from the parties at that time. In so ruling, however,

the Court notes that, at least with respect to the issue of

whether Plaintiffs’ third-party damages claims are relevant,

Judge Tucker recently held in a similar case that “plaintiffs

were the target of the scheme thereby creating a direct relation

between the injuries asserted and the injurious conduct. 

Defendants’ actions were a substantial factor in the events

resulting in Plaintiffs’ injuries. As noted in Hecht, a RICO act

proximately causes injury if it was a ‘substantial factor in the

sequence of responsible causation, and if the injury is

reasonably foreseeable or anticipated as a natural consequence.’” 

State Farm Mut. Auto. Ins. Co. v. Midtown Med. Ctr., Inc., No.

02-7389, 2007 WL 3224542, at *4 (E.D. Pa. Oct. 23, 2007) (citing

Hecht v. Commerce Clearing House, Inc., 897 F.2d 21, 23 (2d Cir.

1990)). 

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AND IT IS SO ORDERED.

 S/Eduardo C. Robreno 

EDUARDO C. ROBRENO, J.