Herbert S. Subin Beat RICO in the Second Circuit July 22 on 'Too Remote' Grounds. Sixteen Motions Say the Next Case Isn't Over.

On July 22, 2026, at the Thurgood Marshall United States Courthouse in Manhattan, the Second Circuit shut the door on Roosevelt Road Re, Ltd. and Tradesman Program Managers, LLC. Circuit Judges Richard C. Wesley, Richard J. Sullivan, and Joseph F. Bianco affirmed Judge Hector Gonzalez's October 3, 2025 dismissal of the reinsurer's civil RICO suit against Herbert S. Subin, Eric D. Subin, and Jorge Arturo Gonzalez Lupi. "Such daisy chains of causation are 'too remote' to establish RICO standing," the panel wrote, borrowing the phrase from Hemi Group v. City of New York, which took it in turn from Holmes v. Securities Investor Protection Corp. Fourteen months after a different insurer sued the same firm in the same district, in a case the docket calls SUBIN III, a magistrate judge still had not set a discovery schedule, with 16 pending motions to dismiss in the way.

The underlying allegations read like a claims file nobody wants. According to the complaint, personal-injury lawyers and their accomplices "recruited construction workers" to "stag[e] . . . fake construction accidents at various construction sites throughout New York" and obtain "fraudulent medical documentation." The complaint alleges they then sought to "profit" by filing "bogus" workers' compensation claims with the New York State Workers' Compensation Board against the construction workers' employers, and "phony" general liability claims in New York state courts against the owners, general contractors, and construction managers tied to those sites. On a motion to dismiss the panel accepted those allegations as true without deciding whether they are true. What it did decide is whether Roosevelt Road Re, a reinsurance company, and Tradesman Program Managers, a management agency that provides services to insurers and reinsurers, stood close enough to the alleged fraud to sue over it themselves.

The ruling narrows who gets to sue when an alleged personal-injury scheme reaches into an insurer's books. Roosevelt and Tradesman argued they were the parties who actually paid for the alleged fraud, through higher reimbursement rates to primary insurers and the cost of investigating bogus claims. The panel disagreed. A reinsurer and the agency that services it now stand outside the RICO plaintiffs' bar in the Second Circuit, at least on the theory Roosevelt and Tradesman tried to plead twice.

The court's reasoning ran through the statute's own words. RICO lets "any person injured in his business or property by reason of" racketeering activity sue for treble damages, but the panel noted that Medical Marijuana v. Horn recently reiterated that the "by reason of" language demands "some direct relation between the injury asserted and the injurious conduct alleged." Roosevelt and Tradesman said the fraud drove up their costs. The panel called that theory "well beyond the first step": the alleged scheme hit construction-site employers and general contractors first, those employers' primary insurers second, and Roosevelt and Tradesman only after that, through side agreements the amended complaints never fully explained.

Herbert S. Subin and Eric D. Subin were the named defendants who kept their win. Their appellate counsel, Erik A. Goergen of Nixon Peabody LLP, defended the district court's dismissal without the panel ever reaching the truth of the underlying fraud allegations. "While Plaintiffs allege a disturbing pattern of fraud," the panel wrote, RICO does not create a universal cause of action that turns state-law claims into federal treble-damages suits. That sentence describes what was pleaded, not what was proven. The panel made no finding that Herbert S. Subin, Eric D. Subin, or Jorge Arturo Gonzalez Lupi committed fraud or violated RICO. It decided only who may sue, and the state-law claims were dismissed without prejudice so they can still be pursued in state court. Herbert S. Subin and Eric D. Subin, whose firm Sentinel last covered in subin-iv-rico-follows-lawyers, now face a second carrier's RICO suit against the firm still pending in the same district, sixteen motions to dismiss deep.

The opinion leaves a door open, in a footnote. The calculus might change, the panel wrote, when an insurer is the fraud's direct target: when an insured party conspires to receive unnecessary medical services, or when a defendant submits claims for services that were never performed. Neither scenario was pleaded here. Roosevelt and Tradesman said they paid for someone else's fraud, once removed. The panel wanted proof the fraud was aimed at them first, and two amended complaints could not supply it. The district court's rejection of the second amended complaint survived too, under a standard the panel said runs de novo whenever a denial of leave rests on an interpretation of law such as futility.

The next fight is not this case. It is SUBIN III, Union Mutual Fire Insurance Co. v. Subin Associates, LLP, filed in the same district in May 2025. On July 31, 2026, Magistrate Judge Peggy Cross-Goldenberg told the parties there that discovery would wait until 16 separately pending motions to dismiss worked through the docket, fourteen months after the case was filed. Case Cash Funding, which Sentinel last covered in ny-marine-case-cash-sue-the-funder as a named defendant alongside Gregory Elefterakis, now sits as a codefendant on the SUBIN III docket, sixteen motions standing between it and discovery. The reinsurer's case is closed. The funder's is not.

Roosevelt Road Re's appeal is over. The doctrine it tested is not new: Sentinel's carrier-rico-playbook-scoreboard tracked this same standing fight, and July 22 just confirmed the door stays shut for the same kind of plaintiff. What stays open is SUBIN III, sixteen motions deep, a funder and a firm both still defendants of record with nothing decided against either. The docket does not say which motion falls first.