The case centers on allegations that Advanced Reimbursement Solutions LLC, a medical billing company, contracted with out-of-network healthcare providers to submit fraudulent claims to United Healthcare Services, Inc. and UnitedHealthcare Insurance Company. ARS filed for bankruptcy and most other defendants settled. The five remaining defendants — Uptown Facility LLC, Metro OTC LLC, Prestige Interventional Group LLC, Lakeshore Interventional Treatment Center LLC, and Gregory Brian Maxon — failed to maintain counsel or otherwise respond, resulting in clerk's entry of default against each.
Judge Douglas L. Rayes of the District of Arizona awarded $1,514,866.38 against Uptown, $2,422,959.68 against Metro, $4,654,674.69 against Prestige, and $2,712,420.20 against Lakeshore, each sum bearing interest under 28 U.S.C. § 1961. United did not seek damages from Maxon. The court noted that the amounts were properly tailored to each defendant's specific billing fraud and supported by itemized accountings in the record.
Three of the defaulting defendants — Uptown, Metro, and Prestige — did appear to contest one thing: the scope of the proposed injunction. They argued that United's original proposed language would improperly enjoin their managers and owners in their individual capacities, even though those individuals were not named parties. The court agreed with that objection, holding that an injunction against a corporation binds its agents only to the extent they act on behalf of that corporation, and that non-parties cannot be enjoined in their separate individual capacities.
The court then turned to United's alternative proposed language, which would bind the defaulting defendants along with their agents, employees, and representatives, and all entities and persons, real, fictitious, or corporate, and their respective officers, agents, servants, employees, successors, and representatives, in concert or participation with them. The court adopted that formulation, reasoning that without it, the defaulting defendants could circumvent the injunction by carrying out prohibited acts through successive corporations not party to the original action. The court cited the Ninth Circuit's decision in I.C.C. v. Rio Grande Growers Co-op., 564 F.2d 848 (9th Cir. 1977), in which comparable language was held binding against the principal of a defunct party who later formed a new company to engage in the same prohibited conduct.
The permanent injunction bars the defaulting defendants and all covered persons and entities from any involvement in claims billing services for healthcare providers, any financial interest in entities that bill claims to United or its affiliates, and any other participation in the healthcare industry that directly or indirectly involves seeking reimbursement from United. The court held permanent injunctive relief was warranted in part because monetary damages were inadequate — they did not account for administrative and investigative costs United incurred — and because the corporate defendants appeared insolvent. The court also noted that other defendants had stipulated to a substantially similar permanent injunction as part of their earlier settlements with United.