Nat'l Comm. to Preserve Social Security and Medicare v. Philip Morris USA, Inc.

In an action under the Medicare Secondary Payer Act, the plaintiffs, two taxpayer advocacy groups and a Medicare recipient, sought to recover twice the amount of Medicare costs advanced because of tobacco-related health issues.  The plaintiffs claimed the tobacco companies committed a battery against the users of their products by exposing them to the harmful and addictive properties of nicotine without their consent.  The case turned on the statutory interpretation of the requirement to reimburse Medicare if there is a “demonstration” that a primary carrier was responsible.  Ultimately, the court dismissed the case before trial based on the court’s interpretation of the statute and previous case law addressing the same issue.  The court also expressed trepidation towards to a possible watershed effect of accepting the plaintiffs’ interpretation.

National Comm. to Preserve Social v. Philip Morris, 601 F.Supp.2d 505 (E.D.N.Y. 2009).

  • United States
  • Mar 5, 2009
  • United States District Court for the Eastern District of New York
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Parties

Plaintiff

  • James Mokeler, on behalf of Medicare
  • Medicare RIghts Center
  • National Committee to Perserve Social Security and Medicare

Defendant

  • Liggett Group, LLC
  • Lorillard Tobacco Co.
  • Philip Morris USA, Inc.
  • RJ Reynolds Tobacco Co.
  • The American Tobacco Co.

Legislation Cited

Medicare Secondary Payer Act, 42 U.S.C. § 1395y(b)

Related Documents

Type of Litigation

Tobacco Control Topics

Substantive Issues

Type of Tobacco Product

None

"Plaintiffs have only minor quarrels with this authority. As for Glover, which contains the most comprehensive and decisive analysis, plaintiffs offer merely an earnest invitation that we elect not to follow the decision because it was penned by the Eleventh rather than the Second Circuit. This invitation National Comm. to Preserve Social v. Philip Morris, 601 F.Supp.2d 505 (E.D.N.Y., 2009) we of course decline. Not only is Glover consistent with the Second Circuit's understanding of the statute as reflected in its decision in Mason, issued three years earlier, but Glover also understands the disturbing practical consequences of plaintiffs' view of the statute. As the Eleventh Circuit explained, plaintiffs' interpretation of the MSP would drastically expand federal court jurisdiction by creating a federal forum to litigate any state tort claim in which a business entity allegedly injured a Medicare beneficiary, without regard to diversity of citizenship or amount in controversy. Second ... an alleged tortfeasor that is sued under the MSP (instead of under state law) could not contest liability without risking the penalty of double damages: defendants would have no opportunity to reimburse Medicare after responsibility was established but before the penalty attached. Third ... [it] would allow individuals acting as private attorney generals to litigate the state tort liability of a defendant toward thousands of Medicare beneficiaries—as a predicate to showing MSP liability—without complying with class action requirements."
"Plaintiffs, two taxpayer advocacy groups and a Medicare recipient diagnosed with lung cancer, bring this action under the Medicare Secondary Payer Act, 42 U.S.C. § 1395y(b) ("MSP"), against several major producers of tobacco products. Suing on behalf of Medicare, plaintiffs seek to recover expenditures made from the Medicare Trust Fund to cover the costs of treating the tobacco-related illnesses of Medicare beneficiaries. They claim that defendants committed a battery against the users of their products by exposing them to the addictive properties of nicotine without their consent. As a result, plaintiffs contend, defendants bear primary "responsibility" within the meaning of the MSP for the costs advanced by Medicare and, under the MSP, are now liable for twice that amount in damages."