Burzynski, In re
| Decision Date | 13 April 1993 |
| Docket Number | No. 92-2883,92-2883 |
| Citation | 989 F.2d 733 |
| Parties | RICO Bus.Disp.Guide 8297 In re Stanislaw R. BURZYNSKI, M.D., and Burzynski Research Institute Inc., Petitioners. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Richard A. Jaffe, Houston, TX, for petitioners.
Mark Wawro, Susman Godfrey, Houston, TX, for Aetna Life and Hinshaw.
Grace P. Monaco, Washington, DC, pro se and for Emprise.
On Petition for Writ of Mandamus to the United States District Court for the Southern District of Texas.
ON PETITION FOR REHEARING
Before SNEED *, REAVLEY, and BARKSDALE, Circuit Judges.
This case resembles one of those 1920's automobiles that sometimes, even when my father was driving, would become stuck on a high center on a slightly improved road in east central Texas following a wet early spring. It seems to defy all efforts of both the district and circuit courts to bring about a final disposition. Certainly some of the blame rests with this court. In our first encounter we properly rejected the defense of privilege which the defendants had argued to defeat all the claims of the plaintiff. 967 F.2d 1063 (5th Cir.1992). We assumed implicitly that on remand the district court would either set aside at least some of its dismissals of various counts of the complaint without prejudice and find that a possible cause of action had been stated, or that all of its dismissals would be transformed into dismissals with prejudice. Our direction to the district court on remand to call for answers by the defendant was based on the first assumption (that some dismissals would be set aside) and did It appears that another possibility existed. That is, for the district court to take no action with respect to prior dismissals without prejudice nor to call for answers by the defendant. At that point the plaintiffs sought a writ of mandamus to direct the district court to reinstate all the claims and call for answers thereto. We granted the writ to which the defendants have responded with a petition for rehearing.
not adequately consider the second (that all dismissals would be altered to "with prejudice.")
We acknowledge error which was based upon the inadequate assumptions set forth above. What the parties want at this stage of the case is a decision with respect to each of the claims--whether its dismissals without prejudice were proper pending additional pleading, were improper because the claim does set forth a cause of action, or were improper because they should be dismissed with prejudice.
While we could lift the writ of mandamus and remand to the district court to make those determinations, the cause of expedited justice is better served by this court assuming this duty and then remanding to the district court such claims as may survive our review with proper instructions.
While the history of the alleged facts in this litigation appears in 967 F.2d 1063, supra, it will assist the reader to repeat them in substance at this time.
The plaintiff, Dr. Burzynski, operates the Burzynski Research Institute (BRI), and treats terminally ill cancer patients with a non-FDA approved treatment based on anti-neoplastins. Burzynski claims the treatment, while experimental, is still reimbursable under many insurance policies, including Aetna's. The plaintiff alleges that in the mid-1980's Aetna began denying rightful claims for this treatment in order to reduce its claims exposure.
One of Burzynski's patients sued Aetna for reimbursement in August 1986. After she died, Burzynski intervened as assignee of her claims against Aetna. Burzynski v. Aetna Life Ins. Co., No. H-89-3976 (S.D.Tex. Apr. 1, 1992) [hereinafter Burzynski I ]. This suit eventually ended in summary judgment for both sides on March 31, 1992. The plaintiff alleges that during the course of the lawsuit, the defendants committed many fraudulent acts.
First, Aetna hired a litigation consultant, Ms. Grace Monaco, who, according to the plaintiff, advised Aetna to file a RICO counterclaim against BRI which the defendants "knew ... had no basis in fact." She also published a litigation "Alert" about the RICO counterclaim.
Second, during discovery in Burzynski I from January to March 1989, Aetna's law firm, Hinshaw, Culbertson, Moelmann, Hoban & Fuller (Hinshaw Culbertson) sent a letter (Aetna/Hinshaw letter) to at least thirty five insurers. The ostensible purpose of the letter was a discovery request, however, it also served to dissuade other insurers from paying BRI claims. It urged them to stop paying BRI claims because the BRI treatment was "worthless," was "mislabel[ed] as chemotherapy," and was "unreimbursable." In addition, the Aetna/Hinshaw letter stated that Dr. Burzynski's claims forms contained misrepresentations and that he "defrauded" Aetna. The letter has an alarmist tone; it begins:
(emphasis added)
Most of the plaintiff's claims against Aetna are based on this letter.
Third, the plaintiff alleges that at some point after Burzynski I began, Aetna, through Monaco, created Emprise, Inc. Emprise ostensibly has no connection to Aetna, and its stated purpose is to provide objective reviews of alternative medical practitioners. However, Burzynski maintains that Emprise has the unstated purpose of generating negative reviews of alternative medical practitioners like Burzynski in order to bolster Aetna's position in denying coverage for this treatment. Burzynski also alleges that Monaco submitted false federal grant applications to gain federal funding for Emprise's projects. He maintains that her applications did not disclose Emprise's "real purpose," its "close working connection" to Aetna, or Monaco's position as an Aetna litigation consultant.
Fourth, during the course of discovery in Burzynski I, Aetna filed "false and misleading ex parte motions" in order to get privileged claims information from other insurers. The court awarded $11,100 in attorneys' fees for this abusive and "almost unconscionable" discovery practice.
Fifth, also during Burzynski I, Monaco contacted researchers at the Medical College of Georgia (MCG) and, according to the plaintiff, tried unsuccessfully to dissuade them from continuing their research on antineoplastons. Consequently, in April 1989, the defendants served subpoenas and notices of depositions on MCG researchers to "intimidate" the scientists into dropping their antineoplaston research project and "without any intention of actually conducting discovery."
Last, to "obtain[ ] leverage in its civil litigation," Aetna "goaded" government agencies, in particular the local U.S. Attorney's office, into investigating Burzynski and gave them false information about him.
Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957), fixed the content of "notice" pleading: "[A]ll the Rules require is 'a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests."
The plaintiff has alleged seven different causes of action, tortious interference with contract, tortious interference with prospective business relations, abuse of process, business disparagement, a violation of the Texas Insurance Code, an Illinois statutory law violation for consumer fraud, and a RICO violation. Guided by Conley v. Gibson, we will examine the plaintiff's causes of action to see if each states a claim.
A cause of action for tortious interference with contract requires: 1) a contract, 2) an intentional act, calculated to cause damage to the plaintiff, that interferes with the contract, and 3) proximate cause of actual damages to the plaintiff. Kiepfer v. Beller, 944 F.2d 1213, 1220 (5th Cir.1991).
The plaintiff adequately pleaded the first element, the existence of a contract. The plaintiff alleged that several BRI patients had insurance contracts with Transport Life Insurance Company, Guardian Life Insurance Company, and Blue Cross and Blue Shield of Massachusetts. Dr. Burzynski and BRI are arguably third-party beneficiaries of these insurance policies, and thus may maintain an action for tortious interference of contract. W. Page Keeton et al., Prosser and Keeton on the Law of Torts § 129, at 1000 (5th ed. 1984).
The plaintiff also pleaded the second element, an intentional act that interferes with the contract and is calculated to cause damage to the plaintiff. This action is based on the Aetna/Hinshaw letter to insurers. Hinshaw Culbertson sent the letter to Transport Life, Guardian Life, and Blue Cross/Blue Shield of Massachusetts, among others. The alarming tone of the Aetna/Hinshaw letter suggests that Aetna intended to cause damage to BRI by halting reimbursements from other insurers.
The plaintiff also pleaded the third element, proximate cause of actual damages. Burzynski alleges that, by sending the letter, Aetna and Hinshaw Culbertson "proximately caused financial injury" of $5,000,000--in other words, the three insurers stopped payments to BRI because of the letter. The district court erred in dismissing the first cause of action, tortious interference with contract, under Rule 12(b)(6). The defendants must respond to the plaintiff's allegations.
Burzynski also pleaded the second cause of action for tortious interference with prospective business relations. The requisite elements are:...
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