Businesses use RICO against alleged litigation abuses

Companies are turning to the Racketeer Influenced and Corrupt Organizations Act to fight alleged litigation fraud.The federal law enacted in 1970 was aimed at organized crime and subsequently used in political corruption cases in Illinois.
A report by The American Tort Reform Association said businesses and insurers have filed nearly 300 RICO lawsuits since 2024, claiming that organized fraud rings allegedly involve law firms, litigation funders, medical providers and others.
Phil Melin, executive director of Illinois Citizens Against Lawsuit Abuse, said different entities allegedly worked together to fraudulently extract litigation settlements.
“It’s kind of a counterattack, but these businesses have filed lawsuits against some of these abusive law firms and have said, ‘Listen, these guys are kind of like organized crime,’” Melin told The Center Square.
American Tort Reform Association Vice President and Counsel Lauren Sheets Jarrell said the report flagged asbestos cases in Illinois.
“These patients were unable to recall where they were exposed to asbestos or how they may have come in contact with it. They were coached on what to say and to perjure themselves,” Sheets Jarrell told The Center Square.
Courts dismissed about 96% out of more than 400 cases against one manufacturer.
“When you have courts filled up with 430 frivolous lawsuits on bogus claims, that puts everybody else, like legitimately harmed people or people who need contract disputes solved or whatever the legitimate things are, they have to wait longer,” Melin said.
Melin said Illinoisans pay an estimated annual tort tax of $2,000.
“That’s why your insurance keeps going up every year, your car insurance, your property insurance, everything goes up. That’s the tort tax that you’re paying because we have a state that tolerates and encourages lawsuit abuse,” Melin said.
Melin said property and casualty insurance rates decreased in Florida after the state implemented tort reform.
Sheets Jarrell said the RICO cases remain in process, but she hopes Illinois courts will take a serious look.
Madison, St. Clair and Cook counties together hold the #7 spot on American Tort Reform Foundation’s 2025-2026 Judicial Hellholes® list. Madison and St. Clair ranked first and second for the most asbestos filings in 2025. Cook County was #5.
Sheets Jarrell said the report did not flag Illinois for alleged cases involving law firms, medical providers and immigrants.
“We’ve certainly seen that as the case in New York, where some of these immigrants have been targeted to do staged trip-and-fall accidents or construction accidents, but we have not seen that in Illinois,” Sheets Jarrell said.
Chris Wade contributed to this story

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