Competitive Injury: Know Your Rights
Educational information for legitimate service providers about competitive harm caused by fraudulent operators.
Important Legal Disclaimers
This Is Not Legal Advice
This page provides general educational information only. Nothing here constitutes legal advice, creates an attorney-client relationship, or should be relied upon as a substitute for consultation with a licensed attorney. Laws vary by jurisdiction and change frequently.
No Encouragement to Sue
This page should not be construed as encouragement or solicitation to file lawsuits. Whether you have a viable legal claim depends on facts specific to your situation. Many factors affect whether litigation is advisable, including costs, time, likelihood of success, and collectability. Most civil cases do not result in recovery for the plaintiff.
Conflicts of Interest Notice
SomaliScan publishes information about providers based on public records. This information is not verified and should not be used as evidence without independent verification from official government sources. If you pursue litigation involving entities listed on this site, you may be asked about your use of this site during discovery.
What is Competitive Injury?
Competitive injury occurs when a business suffers economic harm because a competitor gained an unfair advantage through unlawful conduct. In the context of Medicaid fraud in Minnesota and other states, legitimate service providers may have been harmed when fraudulent operators:
- Received grants, subsidies, reimbursements, or contracts that would otherwise have been available to legitimate providers
- Undercut legitimate providers' pricing by subsidizing operations with fraudulently obtained funds
- Saturated markets with phantom capacity, depressing enrollment at real facilities
- Created artificial competition that forced legitimate providers to reduce services or close
- Damaged the reputation of entire industries, reducing client/patient trust in legitimate providers
Affected Industries
Medicaid fraud affects legitimate providers across multiple service categories:
Childcare Providers
Licensed family and center-based childcare receiving CCAP (Child Care Assistance Program) subsidies
HCBS Providers
Home and Community Based Services including 245D licensed disability services
Autism Care (EIDBI)
Early Intensive Developmental and Behavioral Intervention providers and ABA therapy services
Senior Home Care
Elderly Waiver, home health aides, and aging services providers
PCA Services
Personal Care Attendant agencies serving disabled and elderly individuals
Mental Health Services
ARMHS (Adult Rehabilitative Mental Health Services), day treatment, residential programs
Nursing Facilities
Skilled nursing facilities and assisted living receiving Medicaid reimbursement
Transportation Providers
Non-emergency medical transportation (NEMT) services
Potential Legal Theories
The following legal theories may be available depending on jurisdiction and specific facts. Each has significant requirements and limitations. Consult an attorney before pursuing any claim.
Unfair Competition
Minnesota's Uniform Deceptive Trade Practices Act (Minn. Stat. § 325D) and similar state laws prohibit unfair competitive practices. Requires showing direct competitive harm, not just that fraud existed.
Tortious Interference with Business
Applies when a third party intentionally interferes with existing or prospective business relationships. Requires showing the fraudster specifically interfered with your relationships, not just that they competed in the same market.
Civil RICO (18 U.S.C. § 1964)
For injuries caused by patterns of racketeering activity. Successful plaintiffs may recover treble damages and attorney's fees, but the burden of proof is extremely high.
State False Claims Act (Qui Tam)
Minnesota False Claims Act (Minn. Stat. § 15C) allows private parties to file suit on behalf of the government. Has specific procedural requirements including filing under seal and DOJ notification. Primarily focused on recovering funds for the government, not compensating injured competitors.
Negligent/Intentional Misrepresentation
If fraudulent providers made false statements to clients, grant administrators, or licensing agencies that you reasonably relied upon to your detriment. Requires showing actual reliance and damages.
Potential Damages
Recovery depends on proving causation between the fraud and your specific losses. General market harm affecting all providers may not be sufficient.
Lost Profits
Revenue you would have earned absent the fraudulent competition. Requires showing specific clients or contracts were diverted to the fraudulent provider.
Denied Grants/Subsidies
If you applied for and were denied funding that was instead awarded to a fraudulent provider, you may recover the value of those funds.
Business Closure Damages
If fraud-driven competition contributed to closure or significant downsizing, including lost investment, wind-down costs, and lost business value.
Attorney's Fees
Certain statutes provide for fee-shifting. Many attorneys also take competitive injury cases on contingency (no fee unless you win).
Documenting Your Situation
If you believe your business was harmed, preserve the following documentation for potential consultation with an attorney:
Financial Records
Tax returns, P&L statements, enrollment/client records showing changes during 2020-2024
Grant/Contract Applications
Applications you submitted that were denied, with documentation of who received awards instead
Market Information
Names and locations of providers in your service area who have been charged or are under investigation
Client Communications
Any evidence showing clients chose competitors or expressed concerns about industry trustworthiness
Timeline
When your business began declining, correlated with when fraudulent providers entered your market
Important Considerations
Statute of Limitations
Most claims have filing deadlines (often 2-6 years depending on the cause of action and state). Consult an attorney promptly to avoid losing your right to sue.
Collectability
Many individual defendants may be judgment-proof (unable to pay). Assets may be frozen, seized, or spent. Winning a judgment does not guarantee collecting money.
Costs and Time
Litigation is expensive and time-consuming. Federal cases can take 2-5 years. Consider whether the potential recovery justifies the investment.
Sovereign Immunity
Claims against state agencies for negligent administration face significant sovereign immunity obstacles. Most successful claims target the fraudulent private parties, not the government.
Provider Accountability Grant — $20,000
A $20,000 grant is available to help offset legal costs for legitimate Minnesota service providers pursuing competitive injury claims against fraudulent operators.
Eligibility Requirements:
- You must be a licensed provider in childcare, HCBS, autism care, senior care, PCA, or related Medicaid-funded services
- You must have already retained an attorney or already filed a case — this is not pre-litigation funding
- Your claim must involve competitive harm from providers who have been charged, indicted, or convicted of fraud
- You must provide documentation: signed retainer agreement, court filing, or proof of case initiation
Important Limitations:
- SomaliScan does not evaluate the legal merit of your case — that is your attorney's role
- Grant decisions are based solely on eligibility verification, not case strength
- This grant is a one-time reimbursement for costs already incurred (filing fees, retainer deposits, etc.)
- SomaliScan has no stake in your litigation outcome and receives nothing if you win
- Limited funds available — first eligible applicant(s) will be awarded
How to Apply:
Submit proof of case initiation (retainer agreement or court filing) along with your provider license information via our tip submission form. Include "ACCOUNTABILITY GRANT" in your message. We will verify eligibility and contact you regarding disbursement.
What SomaliScan Does NOT Do
- xWe do not provide legal advice or evaluate the merit of potential claims
- xWe do not refer cases to attorneys or receive referral fees
- xWe do not verify the accuracy of public records displayed on this site
- xWe do not make accusations—we display public government data
- xWe have no financial stake in any litigation outcomes