Stoel Rives Secures $6.5 Million Jury Verdict for Spine Institute of Idaho

Stoel Rives secured a significant victory for its client Spine Institute of Idaho, obtaining a $6.5 million jury verdict in a fraud and contract dispute against Ataraxis, Inc., CEO Stephen Cilley and his related entities. The two‑week trial took place in Ada County before Judge Jonathan Medema and culminated in a decisive ruling in favor of the Spine Institute.

The jury found Ataraxis, Inc., liable for breach of contract and fraud and found Cilley personally liable for fraud. It further determined that Cilley’s affiliated entities—Ataraxis, Idaho; Ataraxis, Nevada; Province Management Group; and ATX PEO—were jointly and severally responsible under theories of successor liability and fraudulent transfer. Evidence showed that Ataraxis, a professional employer organization serving the Spine Institute since 2012, repeatedly misrepresented the status of a substantial Employee Retention Tax Credit (ERTC) claim and concealed that client tax refunds were being absorbed by the company’s own IRS liabilities.

After learning that refunds were being applied to Ataraxis, Inc.’s tax liens, Cilley shifted employees and revenue‑generating contracts to his other companies to evade responsibility. Following three hours of deliberation, the jury awarded $6 million in punitive damages along with all actual damages.

The Spine Institute was represented by a Stoel Rives trial team led by Nicole Hancock, with Cory Carone as second chair, Alaina Harrington, and paralegal Karissa Armbrust.