Federal Judge Ends RICO Path in UVA Health Leadership Dispute
A federal judge has dismissed all claims against former UVA Health leaders in a lawsuit brought by four physicians, sharply narrowing a case that had already been pared back earlier this year. The ruling leaves only two retaliation claims alive, both against UVA Physicians Group, and those claims will move into discovery.
The order closes the door on the most aggressive theory in the case: a Racketeer Influenced and Corrupt Organizations Act claim built around allegations that leadership pushed fraudulent billing practices and kept physicians in place despite patient-safety concerns. The court was not persuaded that the revised pleading changed the legal structure of the dispute. In the judge’s view, the physicians were not injured as direct targets of racketeering conduct; their alleged harm flowed from their refusal to participate.
The Revised Complaint Could Not Rescue the Racketeering Theory
The physicians — Jeffrey Young, MD; Kenan Yount, MD; Mark Roeser, MD; and John Kern, MD — filed the lawsuit on Oct. 3, 2025, in the U.S. District Court for the Western District of Virginia. Their allegations spanned 2020 through 2025 and centered on former UVA Health CEO K. Craig Kent, MD, and other senior leaders. They said the system promoted fraudulent billing practices to inflate procedure costs and retained clinicians who placed patients at risk, then punished them after they objected. The defendants denied the allegations.
In June, the court had already narrowed the case, dismissing several claims without prejudice and canceling a jury trial that had been scheduled for late 2026. The physicians returned with a revised complaint, adding language about extortion and witness tampering in an effort to keep the racketeering claims in play. The judge rejected that effort outright.
“Does not alter the causal structure” was the key point in the ruling. The court concluded that the revised allegations still did not fit the legal requirements for RICO. The physicians alleged coercion, but coercion alone is not enough. The court found they had not pleaded extortion or witness tampering with sufficient detail, and the opinion drew a hard line between institutional pressure and the kind of predicate criminal conduct the statute requires.
One sentence from the order captures the result plainly: the conduct may have been coercive, but it was not extortionate.
Two Retaliation Claims Survive Against UVA Physicians Group
Only two claims remain after the dismissal, and both are retaliation claims against UVA Physicians Group: one under the federal False Claims Act and one under the Virginia Fraud Against Taxpayers Act. Those allegations will now proceed to discovery, where the parties can test the underlying facts surrounding the physicians’ objections, the leadership response, and any employment consequences that followed.
That narrow survival matters because retaliation claims are often the most durable part of a whistleblower-style health system dispute. They do not require the plaintiff to prove the full scope of the alleged billing or compliance scheme at the pleading stage. Instead, the immediate question becomes whether adverse action followed protected objection activity. The case now rests on that narrower framework rather than on the broad criminal framing that originally dominated the complaint.
For UVA Health, the practical consequence is a major reduction in exposure. The dismissed defendants include Dr. Kent; Melina Kibbe, MD, former dean of the UVA School of Medicine; Wendy Horton, PharmD, former CEO of UVA Health University Medical Center; Allan Tsung, MD; Ourania Preventza, MD; Kim de la Cruz, MD; and the Rector and Visitors of the University of Virginia. Senior Judge Norman Moon granted all five pending motions to dismiss the revised complaint, terminating those defendants as parties on Oct. 23.
Sovereign Immunity Survives Despite the Judge’s Doubt
The opinion also addressed a question with wider implications for Virginia’s public universities: whether the University of Virginia can claim sovereign immunity. Here, the judge was unusually explicit. Applying the test from a 2026 U.S. Supreme Court decision, he wrote, “strongly suggests” that UVA is not an arm of the state. He pointed to the university’s separate corporate form, its control over a $15.5 billion endowment, and the absence of any law requiring the commonwealth to pay judgments against it.
Even so, the court concluded it remained bound by Fourth Circuit precedent holding that Virginia’s public universities are immune. The ruling therefore preserved UVA’s immunity from suit in this case, despite the judge’s own skepticism about how the Supreme Court’s newer test might apply. He added that any change in the legal status of Virginia’s universities after Galette would need to come from the appeals court first.
That passage gives the decision unusual institutional weight. The case is not only about one university health system’s internal conflict; it also touches the legal architecture that protects public universities from certain lawsuits. For now, the older circuit precedent controls, even where the lower court sees tension with a later Supreme Court framework.
A Narrower Case, a Faster Timeline
The court has set short deadlines for the next phase. The physicians have until Nov. 4 to file a third amended complaint limited to the retaliation claims against UVA Physicians Group. Any motion seeking an interlocutory appeal of the immunity ruling is due Oct. 28.
The compressed schedule may matter as much as the dismissal itself. Litigation that began with sweeping allegations of fraud, coercion, and retaliation now faces a much smaller factual field and a narrower legal theory. The dismissed RICO claims will not return in their current form unless a higher court takes a different view, and the immunity question appears likely to move toward appellate review if the plaintiffs choose to challenge it.
Baker Donelson, which represented Dr. Kent, Dr. Kibbe, Dr. Horton and Dr. Tsung, announced the ruling on Oct. 23. In a joint statement, Dr. Kent, Dr. Kibbe and Dr. Horton said they were pleased with the decision and proud to have led UVA Health, an organization with more than 18,000 employees and 1,200 physicians, over a period of many years with integrity and proven success.
An attorney for Dr. de la Cruz and a UVA spokesperson declined to comment. Becker’s also reached out to attorneys for the plaintiffs, UVA Physicians Group and Dr. Preventza.
For now, the case has been reduced to a question of retaliation and procedural survivability, not enterprise-wide racketeering. The next filing deadline will determine whether even that narrower dispute advances with enough specificity to keep the remaining claims alive.