Pashman Stein Walder Hayden P.C. Defends Auto Insurers’ Efforts to Fight Insurance Fraud Before New Jersey Supreme Court
Pashman Stein Walder Hayden P.C. managing partner Michael S. Stein, partner David N. Cinotti, and counsel Darcy Baboulis-Gyseck, represent Allstate before the New Jersey Supreme Court in defending its January 2025 New Jersey Appellate Division win reversing the trial court’s dismissal of Allstate’s complaint. The New Jersey Appellate Division, expressly disagreeing with the U.S. Court of Appeals for the Third Circuit, held in a precedential decision that the Insurance Fraud Prevention Act and state Anti-Racketeering Act (RICO) claims are not subject to PIP arbitration pursuant to AICRA and remanded the claims to the trial court. Allstate’s position was supported by numerous amici before the New Jersey Supreme Court, including the New Jersey Department of Banking Insurance and the Office of the Insurance Fraud Prosecutor.
The case was featured in a recent Law.com article, “As NJ Justices Weigh Arbitration for Insurance Fraud Cases, Litigators Warn the System Is Unprepared.” The article includes commentary from insurance defense litigators who agreed that personal injury protection claims brought under the Insurance Fraud Prevention Act and RICO should not be arbitrated, stating that it was not meant for that purpose, and could tax an already burdened system. The article notes:
During state Supreme Court oral arguments last month, Justice Anne E. Patterson said a major theme of the Appellate Division’s opinion revolved around AICRA not being designed to handle large, complex insurance claims that may involve widespread discovery and could go on for years. Although defense counsel in the case, Brian M. Block of Mandelbaum Barrett, countered that the Appellate Division’s finding was “not consonant with what the legislature envisioned” with AICRA, David N. Cinotti of Pashman Stein Walder Hayden, who represented Allstate, told the justices that, if parties being sued for insurance fraud related to PIP claims are allowed to arbitrate rather than face the courts, the effect on insurance fraud would be “massive” in New Jersey.
Insurance defense litigators who spoke with Law.com agreed with Cinotti’s assessment.
To read the full article in Law.com, click here.