On Jan. 14, 2003, Allstate Insurance Company filed an amended complaint charging Dallas, Texas-based Accident & Injury Pain Center, Inc. (A & I), its related entities and various chiropractors, osteopaths and medical doctors with common-law fraud; common-law conspiracy; unjust enrichment; and violations of "numerous provisions of the Texas Occupations Code." Named in the lawsuit were A & I owner Robert Smith; chief of staff and compliance officer Thomas Rhudy, DC; 9 associated companies; 3 medical doctors; 13 additional DCs; 2 osteopaths; and 1 pharmacy. Allstate requested that the court declare "that they [Allstate] are not liable for, and do not owe" over $41 million in fees billed to Allstate by A & I and its various associated companies.1 It was estimated that A & I and its various related entities were billing over $100 million per year to different insurance companies.
On Aug. 23, 2001, Texas Gov. Rick Perry appointed Dr. Rhudy (who is also a member of the National Association for Chiropractic Medicine - NACM) to the Texas Board of Chiropractic Examiners. The appointment was made just 84 days after A & I owner Robert Smith made a $25,000 donation to "Texans for Rick Perry." This donation was Smith's first recorded donation to the governor. Although Rhudy was appointed by Gov. Perry and was considered a member of the chiropractic board, the Texas State Senate was required to confirm his appointment during the first half of 2003.
Toward the end of 2002, A & I owner smith made several more contributions totaling $80,000, targeted toward individuals involved in the confirmation process. Among Smith's additional monetary gifts were an additional $25,000 to Gov. Perry; $25,000 for Lieutenant Gov. Dewhurst (who is president of the Senate, and appoints the Senate Nominations Committee that would ultimately make recommendations on Rhudy's appointment); and $5,000 to Robert Deuell, MD, vice chairman of the Senate Committee on Nominations. Burns' total contributions to Texas legislators, before and during the time of Rhudy's appointment, exceeded $270,000.2
Dynamic Chiropractic published an article exposing the Allstate lawsuit and Burns' donation history in the Feb. 24, 2003, issue of DC.3 The article was placed the ChiroWeb.com on Jan. 28, 2003. In addition, the American Chiropractic Association (ACA) sent Gov. Perry a letter on Feb. 3, 2003, voicing their opposition to Rhudy's appointment.
On Feb. 6, 2003, the Texas Board of Chiropractic Examiners received a copy of a letter from Gov. Perry to the Texas Senate stating:
"On January 20, 2003, I submitted the name of Thomas R. Rhudy of Rockwall for appointment to the Texas Board of Chiropractic Examiners for a term to expire February 1, 2007.
"I hereby withdraw his nomination for this committee and request that the Senate return this appointment to me."
Dr. Rhudy may still be a member of the NACM, but he is no longer a member of the Texas Chiropractic Board, and remains a defendant in the ongoing $41 million Allstate lawsuit.
- Allstate Insurance Company et al vs. Accident & Injury Pain Centers, Inc. et al. Civil Action No. 3-01-CV2247-N. www.chiroweb.com/rhudy.
- A report of all donations to Texas legislators is available online at: http://txprod.ethics.state.tx.us/tx00/.
- NACM member sued by Allstate. Dynamic Chiropractic, Feb. 24, 2003. www.chiroweb.com/archives/21/05/01.html.
