A Southern California judge threw out a $40 million malicious prosecution complaint Michael D. Drobot filed against three law firms and more than 30 people who sued him for his alleged role in a spinal hardware counterfeiting scheme, calling it a Strategic Lawsuit Against Public Participation.
A different judge in April dismissed a separate defamation complaint Drobot filed as a SLAPP suit.
Los Angeles Superior Court Judge Michael L. Stern on July 20 granted the motion to dismiss the complaint Drobot filed demanding $30 million in compensatory damages and $10 million in punitive damages.
Drobot on April 13 filed a malicious prosecution claim against the law firms of Knox Ricksen, Kabateck Brown Kellner and Cotchett Pitre & McCarthy, as well as a handful of attorneys at the firms and about 300 clients they represented in a civil complaint accusing Drobot of battery, fraud, breach of fiduciary duty and implied warrant, strict product liability, intentional infliction of emotional distress and negligence. The complaints alleged Drobot schemed with several Southern California hospitals to use counterfeit screws in spinal hardware surgeries.
Attorneys for Drobot denied their client was involved in counterfeiting or using counterfeit medical hardware.
Drobot, the former owner of Pacific Hospital of Long Beach, in April 2014 pleaded guilty to two federal charges of paying kickbacks and conspiring to defraud a federal health care program. The federal indictment did not contain any allegations about counterfeiting. He faces up to 10 years in prison at a sentencing hearing that was recently pushed back to 2016.
In February, Los Angeles Superior Court Judge Elihu M. Berle dismissed Pacific Hospital and Drobot as defendants in three of the 30 cases, saying the plaintiffs were not patients at the Long Beach hospital and had standing to sue only the facilities where they had a fusion performed. Following the decision, all but two of the remaining plaintiffs, who were also patients at other hospitals, voluntarily dismissed their complaints
Two cases by former Pacific Hospital patients are still pending.
Stern said in his order there are three elements for a successful malicious prosecution case: Plaintiffs alleging malicious prosecution must show the action was initiated by the defendant and pursued to a legal termination favorable to the plaintiff, the case was brought without probable cause, and the case was initiated with malice.
Voluntary dismissal of a case is a favorable termination, but only if the circumstances of the dismissal reflect the opinion of a judge that the action had no merit. Because there was conflicting evidence about the reason the cases were dismissed, Stern said he focused only on the remaining two prongs of the test.
Stern said Drobot offered no evidence showing that the plaintiffs had malicious motivations in filing the complaint. He also said a reasonable person could have believed the complaints had merit.
“This court, after analyzing the facts and legal arguments and based on the evidentiary presentations made by the parties, independently determines that the lawyer defendants have established that a reasonable lawyer would have a good faith basis to believe the claims they filed on behalf of the patient defendants were at least ‘arguable’ and ‘tenable’ as a matter of law,” Stern wrote in his decision. “The patient defendants were entitled to rely, and did reasonably rely, upon the advice of retained legal counsel in initiating and then eventually dismissing those cases voluntarily.”
Without evidence that Drobot might prevail with his action, Stern said the complaint failed the SLAPP test.
Motions for fees and costs filed Thursday are demanding Drobot pay about $200,000, according to Harry W. R. Chamberlain, an attorney with Buchalter Nemer who is representing the three law firms and their attorneys in the case. Chamberlain said the requested fees and costs are so high because of the large number of defendants in the case.
A hearing on motions for the fees and costs is scheduled for Aug. 25.
This article originally appeared in WorkcompCentral on July 31, 2015