Insurer-backed lobby calls New York the hub of civil RICO fraud suits

What happened

The American Tort Reform Association (ATRA), an insurance-backed group that lobbies to change civil liability laws, released a report this month called "Turning the Tables?" It says that in more than two dozen cases, businesses and insurers have used the federal RICO Act, a law originally aimed at organized crime, to fight what they allege is coordinated litigation fraud. The report names New York as an epicenter. amNY reported on the report on October 13, 2026.

The report focuses on the Scaffold Law, which holds property owners and contractors liable for gravity-related construction injuries. It cites nine RICO suits by contractors, insurers and reinsurers alleging that law firms staged falls. It also points to ABC investigations, including one that found a Bronx apartment listed as the home address for plaintiffs in 30 construction injury lawsuits. According to amNY, at least four of those nine suits have been dismissed. One, brought by Tradesman Program Managers and Roosevelt Road in the Eastern District of New York, was dismissed after a judge ruled that Roosevelt Road was a reinsurer, not a primary insurer, and lacked standing.

The report also covers trip-and-fall cases. Insurers have filed several RICO suits in the Eastern District of New York alleging that runners staged falls on cracked sidewalks in Brooklyn, Queens and the Bronx, then recruited claimants and medical clinics for false diagnoses and unnecessary spinal surgeries. Last week, the New York City Law Department filed its own RICO lawsuit against a Manhattan law firm it says ran a similar personal injury fraud scheme.

ATRA wants to remove the cap on sanctions for frivolous suits, which is $10,000 in New York, and end "safe harbors" that let firms drop weak cases without penalty. The New York State Trial Lawyers Association disputes the report. It says the law is not strict liability and notes that defamation suits have been filed against insurers in several cases. The New York Committee for Occupational Safety and Health says falls are still the leading killer on construction sites.