Plaintiff Susan Early was allegedly injured while a passenger on one of Carnival Corporation’s ships.  A claim was initiated, then (apparently) resolved.  The mediator in the matter filed his report on November 21, 2012.  That report stated that the parties had settled subject to the condition that the Court retain jurisdiction to enforce the terms of the settlement and determine the issue of a possible LMSA if one were needed.  Early motioned the Court for Determination of Whether a Medicare Set Aside is Required.  The terms of the settlement negotiations were:

Harvard University and the National Football League Players Association (“NFLPA”) are negotiating a deal with the NFL seeking a $100 million grant for the purpose of studying, diagnosing, and treating injuries and ailments suffered by players as a result of their football careers.

On October 31, 2012, lawyers representing thousands of former NFL players filed an opposition brief to the NFL’s current motion to dismiss pending in U.S. District Court in Pennsylvania, insisting that based on the gravity of the harm incurred, their lawsuit against the League must be allowed to move forward.  The brief rejected the NFL’s contention that the action was essentially a labor dispute that needed to be resolved under the league’s collective bargaining agreement.

The Plaintiffs accused the NFL of “orchestrat[ing] a disinformation campaign,” insisting that the League “knew that players were exposed to risks of severe neurological injuries yet did nothing to prevent them.”  However, the League has, time and again, publicly denied that it knew of any long-term dangers posed by concussions.  Further, the NFL insists that it did not intentionally lie to players about the potential side effects.  Instead, it stated that it delegated the decisions about players’ conditions and return-to-play decisions to individual team doctors and trainers.

At this point, U.S. District Judge Anita Brody must decide how to proceed with the extremely cumbersome litigation.  If a settlement is not reached and the case is not dismissed, it is possible that the individual cases could be returned to the multiple districts where they originated forcing the parties to proceed with separate trials.

Ex-players reply to NFL’s motion to dismiss cases

This morning the Supreme Court issued its long–awaited decision on the constitutionality of the Patient Protection and Affordable Care Act. The Court upheld the most important feature of the act, the individual mandate, which requires that individuals not covered by health insurance buy coverage or face a “shared responsibility payment.” This mandate was critical to the success of the Act, since the availability of affordable coverage for the millions of uninsured Americans required a large pool of customers. In reviewing the authority of Congress to require this mandate, the Court found that it falls within the taxing power of Article I, Section 8 of the Constitution. The Court also noted that the individual mandate was not an appropriate exercise of Congressional power under the Commerce Clause or the Necessary and Proper Clause. Writing for a plurality of justices, Chief Justice Roberts noted that the questions of the soundness of the policy is not an issue for the court to consider, but only to decide whether it is an appropriate exercise of Congressional authority. Ultimately the Court found that the mandate’s imposition of a penalty for failing to purchase insurance was not commerce that could be regulated by Congress, but would fall within its taxing power. In finding that the mandate was a tax, the Court adopted the position of the Solicitor General, and guaranteed that the issue will continue to resonate in political debates through the November election.

Socrates said the obligation of judges is to “Hear courteously, Consider seriously, Decide Impartially.” And that appears to be what the United States Supreme Court is doing as it considers a series of related issues raised by numerous challenges to the Patient Protection and Affordable Care Act including one predicated on the Anti-Injunction Act. The Court expanded the time for argument, offering the lawyers for the parties and several lawyers appointed to argue positions that neither party had advanced time to present their positions and answer questions for three days. In the course of those days of argument, the justices asked thoughtful questions probing the basis for each party’s position, the limits to their proposed rules of law, and the grounding for their position in statutory and constitutional law as well as the Court’s past precedent. Anyone watching the argument, or reading the transcript, or listening to the audio tapes would conclude that the issues presented are difficult and that the Court has listened courteously to all viewpoints and is considering seriously its decision. In fact, the process has been a tribute to the Court and seems to me likely to enhance the Court’s status as a revered American institution if the ultimate decision, and any dissent, is written in a manner that conveys impartiality. 

Socrates said the obligation of judges is to “Hear courteously, Consider seriously, Decide Impartially.” And that appears to be what the United States Supreme Court is doing as it considers a series of related issues raised by numerous challenges to the Patient Protection and Affordable Care Act including one predicated on the Anti-Injunction Act. The Court expanded the time for argument, offering the lawyers for the parties and several lawyers appointed to argue positions that neither party had advanced time to present their positions and answer questions for three days. In the course of those days of argument, the justices asked thoughtful questions probing the basis for each party’s position, the limits to their proposed rules of law, and the grounding for their position in statutory and constitutional law as well as the Court’s past precedent. Anyone watching the argument, or reading the transcript, or listening to the audio tapes would conclude that the issues presented are difficult and that the Court has listened courteously to all viewpoints and is considering seriously its decision. In fact, the process has been a tribute to the Court and seems to me likely to enhance the Court’s status as a revered American institution if the ultimate decision, and any dissent, is written in a manner that conveys impartiality.

Television, radio, newspapers, and the blogosphere are filled with discussion – and the media seems a veritable school for the public about some complex issues.  Discussions focus on the connection between the individual mandate and the community-rating provision and the guaranteed-issue provision, federalism and state versus federal powers, the commerce clause, court-watching and speculation about the outcome of the decision, and presidential politics and the impact of any ruling on the election next fall. With so much prognostication going on about the outcome, I will keep my prediction to myself. But I will say that the parties were uniformly represented by capable and articulate advocates, and the Court focused on key points that it will need to consider in reaching its decision. I hope that when any decision – or set of decisions – issues, the justices will use care in their language to avoid any suggestion that disagreements are due to partisan differences, rather than differences in how the justices view the legal issues. 

Two recent rulings denying motions to remand in chemical exposure cases by demonstrate that a complaint must contain sufficient facts to show legitimate claims against all parties.  A failure to properly plead causes of action allows a federal court to conclude a claim does not exist and therefore maintain jurisdiction over the case under the doctrine of fraudulent joinder.  

Bayer CropScience LP was sued by two individuals who live near the Institute, West Virginia, plant and who claim illness as a result of exposures during a ten day period in 2009. Sue Ferguson Davis v. Bayer AG, et al., Civil Action No. 2:11-cv-00879 and Donna Willis v. Bayer AG, et al., Civil Action No. 2:22-cv-00880.  Both filed virtually identical complaints in state court naming Bayer CropScience and others, including West Virginia Paving, Inc., a West Virginia corporation, as defendants.  The plaintiffs claimed exposure to toxic fumes “negligently released into the atmosphere..." caused a variety of personal injuries.  Bayer CropScience removed the cases to federal court arguing that both Complaints did not contain particular factual allegations justifying claims against the non-diverse party, West Virginia Paving.  Inclusion of that company as a defendant destroyed diversity, precluding removal to federal court.  Both plaintiffs filed motions to remand.

On the issue of diversity jurisdiction the Court found all of the defendants except West Virginia Paving were from different states or countries than the two West Virginia plaintiffs.  Only if West Virginia Paving was fraudulently joined to prevent federal jurisdiction, could the case remain in federal court.

Recognizing well-settled law, Judge Joseph R. Goodwin explained that the doctrine of fraudulent joinder allows federal courts to disregard the citizenship of non-diverse defendants for jurisdictional purposes.  A heavy burden is placed on parties who seek federal jurisdiction, as they must demonstrate there is “no possibility” that plaintiff can establish a case against the in-state defendant or there is outright fraud in the facts pled in the complaint.  

The judge concluded the complaints lacked even a “glimmer of hope” of establishing claims against West Virginia Paving and denied remand in both cases.  He found the complaints simply did not link West Virginia Paving to the specific chemical leak described in both complaints, and concluded (as admitted by plaintiffs) that “West Virginia Paving’s conduct could not have caused the plaintiff’s injuries, ….because [it] was not operating a chemical facility at any point around that date.” Without West Virginia Paving as a defendant, there was complete diversity between the parties, and the court therefore denied plaintiffs’ motion to remand.

Medicare expands resolution options to include a new Medicare repayment program for small settlements or judgments. This program will be available starting in February 2012 and applies to cases settling for $25,000 or less.  Under this program, Medicare will provide final conditional payment amounts before settlement under certain circumstances.  This program has the potential to revolutionize the settlement process for many Medicare beneficiaries, their counsel, and settling parties.  The foundation of that process is to start the verification process early.  

Recently, the Centers for Medicare and Medicaid Services (“Medicare”) released guidance (the “Alert”) relevant to conditional payment reimbursement under the Medicare Secondary Payer (“MSP”) Act (42 U.S.C. §1395y(b)(2)).  This guidance permits certain Medicare beneficiaries to receive a final conditional payment amount from Medicare prior to date of settlement.  Historically, Medicare’s conditional payment reimbursement process has not allowed a Medicare beneficiary or settling parties from obtaining such information from Medicare or its recovery contractors.
 
Under this small settlement option, for a Medicare beneficiary to obtain a final conditional payment amount prior to settlement, the fact pattern must meet all of the following criteria:

1. The liability insurance (including self-insurance) settlement will be for a physical trauma based injury (the settlement does not relate to ingestion, exposure, or medical implant);
2. The total liability settlement, judgment, award, or other payment will be $25,000 or less;
3. The Date of Incident occurred at least six months before the beneficiary or representative submits the proposed conditional payment amount to Medicare; and
4. The beneficiary demonstrates that treatment has been completed and no further treatment is expected either through a written physician attestation or by certifying in writing that no medical treatment related to the case has occurred for at least 90 days prior to submitting the proposed conditional payment amount to Medicare.

If the case meets all of these qualifying criteria, then Medicare, through its recovery contractor, the Medicare Secondary Payer Recovery Contractor (“MSPRC”), will provide a final conditional payment amount prior to settlement.  This final conditional payment amount provided by the MSPRC will only be valid if the Medicare beneficiary settles a claim within sixty (60) days of the date of Medicare’s response.  According to MSPRC, this option will be available to Medicare beneficiaries starting in February 2012, and will effectively allow Medicare’s related claims to be identified pre-settlement.  While the process has not been fully defined, it is likely that once settlement is finalized, the process of requesting a final demand amount from Medicare (by providing gross settlement amount, fees, costs and expenses) will remain the same, regardless of whether this small settlement resolution program has been utilized.

Starting the Medicare repayment process early provides the best opportunity to comply with all Medicare Secondary Payer obligations while expediting the case.  Medicare’s 2012 small settlement resolution program reinforces the need to START EARLY!  To take advantage of this program in a $25,000 or less case means needing to know if an individual is Medicare enrolled, and if so, how much in medical expenses has Medicare paid conditionally.  Having a formalized settlement process that integrates these core concepts will achieve efficiencies and enhance the effectiveness in settlement proceedings.  Such a formalized settlement process should include an analysis of the applicability of this small settlement resolution program.  Thus, screening a case/claim up front to verify entitlement, establishing a tort recovery record with Medicare early in the process and obtaining the first conditional payment letter from Medicare (all as part of a formalized settlement process) and resolution path is the proper path to take advantage of this small settlement resolution program.  Although Medicare currently does not intend to include exposure, ingestion or implantation cases in this program, the Alert identifies that this will be a work in progress.  As a result, if this program creates the intended results that benefit the settling parties, taxpayers and the Medicare program, an extension of this program in 2013 may not be out of the question. 

Medicare intends to issue additional guidance on how to participate in this program in January 2012.  The DRI MSP Task Force will provide further program details once they have been released.  Until then, we continue to stress the importance of verifying Medicare enrollment as early in the settlement process as possible, as that information will better define the scope of the settlement continuum; from reimbursement to reporting to potential future cost of care issues.

CMS Announcements on Fixed Percentage Option for Settlements of $5,000 or less, $300 Threshold Limit for Reimbursement, and Identification of Contractor for Medicare Secondary Payer Recovery

The Centers for Medicare and Medicaid Services (“CMS”) posted an alert (the “Alert”) that confirms that there has been an extension, in certain cases, of the reporting trigger date for Mandatory Insurer Reporting (“MIR”) under Section 111 of the MMSEA.  The Alert provides the new trigger dates based on gross settlement/judgment/other payment (“TPOC”)  values for claims as follows: