In this edition of Litigation Roundup, a federal judge finds more flaws in the No Surprises Act, a Houston attorney is found guilty of obstruction of justice and Texas Attorney General Ken Paxton agrees to apologize and pay-up to settle Whistleblower suit.
Have a development we should cover in the next Litigation Roundup? Please let us know at [email protected].
Southern District of Texas
Houston PI Lawyer Guilty in Case-Running Scam
Richard Plezia, a Houston personal-injury lawyer, was convicted in federal court of charges stemming from a scheme to buy cases from case runners.
Earlier this month, a jury in the court of U.S. District Judge Lee H. Rosenthal found Plezia, 56, guilty of conspiracy, making false statements and falsification of a record. Judge Rosenthal has scheduled sentencing for May 31. The lawyer — who also faces disciplinary action by the State Bar of Texas — could be sentenced to 20 years on the falsification of records charge and five years on each of the other convictions. He is free on bond pending sentencing.
According to trial evidence, Plezia used his business account to funnel about $500,000 from fellow lawyer Jeffrey Stern to pay case runner Marcus Esquivel to round up personal injury cases.
In addition to buying cases from Esquivel, the trial record showed, Plezia filed false tax returns and lied to federal authorities when he claimed he had not paid Esquivel for case referrals.
Stern and Esquivel previously pleaded guilty and agreed to cooperate in the prosecution of Plezia.
“We are a nation of laws, where lawyers swear to uphold those laws,” said Alamdar Hamdani, U.S. attorney for the Southern District of Texas. “When lawyers like Plezia corrupt their oath for their own gain, such actions can corrode the public’s confidence in our legal system.”
The case was prosecuted by Assistant U.S. Attorneys Robert S. Johnson and Richard Bennett.
Plezia is represented by Christopher L. Tritico and Ron S. Rainey of Tritico Rainey.
The case number is 4:19-cr-00450.
Eastern District of Texas
No Surprises Act Regulations Dealt Another Blow
The Texas Medical Association and two East Texas-based air ambulance companies were vindicated recently by a federal judge who determined portions of a final rule in the No Surprises Act unlawfully favors insurers “and must be set aside.”
The act requires out-of-network emergency medical providers seek reimbursement directly from health plans and insurers in an arbitration process rather than balance billing patients. In the independent dispute resolution process, an arbitrator has to choose whether the amount proposed by the provider or the amount proposed by the plan or insurer should be reimbursed by considering several factors, including the qualified payment amount — the median in-network reimbursement rate for medical services.
U.S. District Judge Jeremy Kernodle, in a Feb. 6 ruling, found that the revamped version of the final rule, issued in August, “continues to place a thumb on the scale for the [qualified payment amount] by requiring arbitrators to begin with the QPA and then imposing restrictions on the non-QPA factors that appear nowhere in the statute.”
Judge Kernodle struck down an earlier version of the Act in July that had required arbitrators to presume the qualifying payment amount was appropriate unless the provider proved otherwise.
Judge Kernodle found that version “improperly restricted arbitrators’ discretion.”
Texas Medical Association is represented by Eric D. McArthur, Penny Packard Reid, Brenna E. Jenny, Jaime L. M. Jones, Joseph R. LoCascio and Madeleine Joseph of Sidley Austin.
LifeNet and East Texas Air One are represented by Steven Shepard, Stephen Shackelford, Max Straus and Craig Smyser of Susman Godfrey.
The U.S. Department of Health and Human Services is represented by Anna L. Deffebach of the Department of Justice.
The case number is 6:22-cv-00372.
Erath County District Court
Mental Health Center Named in Sex Assault Suit
The Pecan Valley Centers for Behavioral & Developmental Healthcare has been sued by a Jane Doe plaintiff alleging an administrator carried out sexual assaults at one of its facility for years while management ignored it.
The civil negligence lawsuit, filed Feb. 9, comes in the wake of former system administrator Arran Spoede’s September arrest. He’s been criminally charged with aggravated sexual assault of a child and possession or promotion of child pornography. The second charge stems from his use of his Pecan Valley-owned mobile phone to record the alleged assaults.
Spoede is not named as a defendant in the suit, but Pecan Valley and its contractors — East Texas Behavioral Resources Inc., Red River Hospital and Avail Solutions — all face claims for negligence and gross negligence.
The Jane Doe who filed this suit is the former stepdaughter of Spoede who alleges she was 12 when the assaults, some of which took place at a Pecan Valley facility in Stephenville and involved other patients there, began.
Pecan Valley is the operator of behavioral health facilities in Erath, Hood, Jonson, Palo Pinto, Parker and Somervell counties that treat patients suffering from mental illness and alcohol and chemical dependencies.
Doe alleges she informed Pecan Valley of her allegations weeks before filing suit and they were met with silence.
The case has been assigned to Erath County District Judge Jason Cashon. Counsel information for Pecan Valley wasn’t available Monday.
Doe is represented by Rogge Dunn of Rogge Dunn Group and James Beam of Stephenville.
The case number is 23CVDC-00026.
Texas Supreme Court
Top Aides Fired by Paxton to Get Apology, $3.3M
Texas Attorney General Ken Paxton has agreed to apologize to the four whistleblowers suing him and pay $3.3 million to settle their allegations that he fired them after they reported to the FBI and Texas Rangers their belief he abused the power of his office to benefit a campaign donor.
In a motion filed Feb. 10, Paxton and the whistleblowers asked the state’s high court to abate the suit while the parties finalize the settlement. That filing comes about two weeks after an initial motion to abate was filed with the court that was only joined by three of the four whistleblowers.
James Blake Brickman told the court in a Jan. 26 filing he was not participating in settlement negotiations like his former colleagues — J. Mark Penley, David Maxwell and Ryan Vassar — and asked the Texas Supreme Court continue to consider whether to hear the case.
Paxton had maintained throughout the litigation that as an elected official the Whistleblower Act doesn’t apply to him.
The four attorneys who brought this lawsuit were among eight who left the office of the attorney general in October 2020 after accusing Paxton of wrongdoing that included bribery and tampering with government records.
The mediated settlement agreement, attached to the joint motion to abate, also requires Paxton to remove from his website a press release that called the Whistleblowers “rogue employees.”
“Whereas, Attorney General Ken Paxton accepts that plaintiff acted in a manner that they thought was right and apologizes for referring to them as ‘rogue employees,’” the settlement reads in part.
Brickman is represented by Thomas A. Nesbitt and William T. Palmer of DeShazo & Nesbitt.
Penley is represented by Don Tittle and Roger Topham of Law Offices of Don Tittle.
Maxwell is represented by T.J. Turner of Cain & Skarnulis.
Vassar is represented by Joseph R. Knight of Ewell Brown Blanke & Knight.
OAG is represented by solicitor general Judd E. Stone II, Lanora C. Pettit and William F. Cole of the Office of the Solicitor General and William S. Helfand and Sean O’Neal Braun of Lewis Brisbois Bisgaard & Smith.
The case number is 21-1027.
Editor’s Note: Bruce Tomaso contributed to this report.