Cal Biz Lit

Cal Biz Lit Re-emerges From Under Rock

Here at CBL, we were pretty overwhelmed with our day job for a number of weeks, and then left town with Mrs. CBL to lie on a beach for a week reading books about rock and roll and baseball.  All of which means it’s been awhile between posts. 

Meanwhile, the legal wheels in California (and all over the country) kept spinning along.  Here are a few glimpses of what’s new:

Class Actions:  Those who do not themselves live under rocks already know that the US Supremes poleaxed the employment discrimination case against Wal-Mart Stores in  Wal-Mart Stores, Inc. v. Dukes, No. 10–277, (U.S. June 20, 2011).  CBL thinks this decision may have some major impacts in California consumer litigation, and will have a post devoted to that subject coming soon.

Medicare Reporting:  A district court judge in Arizona took a big swipe at CMS’s practice of demanding that plaintiff’s and their attorneys cough up Medicare reimbursements when the amounts are contested.  Haro v. Sebelius, No. CV 09-134 TUC DCB, (D. Az., May 5, 2011).  The court granted summary judgment and class certification, ruling:

• . . .  Defendant's demand for payment of her MSP reimbursement claims, under threat of collection actions before there has been a resolution of an appeal regarding the amount of the Defendant's MSP claim or a waiver request, exceeds her authority under the Medicare statute, and Defendant is enjoined from demanding payment of a MSP reimbursement claim with threats of commencing collection actions before there is a resolution of an appeal or waiver request.

and

• . . . Defendant's demand that attorneys withhold liability proceeds from clients pending payment of amounts claimed by the Defendant as MSP reimbursement exceeds her authority under the Medicare statute, and Defendant is enjoined from demanding that attorneys withhold liability proceeds from their clients pending payment of disputed MSP reimbursement claims.

CMS has suspended the use of its heavy-handed “Rights and Responsibilities” letters, but NB:  all of the obligations on both sides to protect the interests of Medicare, and all of the MMSEA reporting requirements, are still in effect.

Civil Procedure:  Hey there, defense counsel.  You won an order granting summary judgment.  Good for you. But that’s not a “judgment.”  You still have to get the court to sign one of those.  And if you don’t, the plaintiff can get a writ of mandate from the Court of Appeal forcing the trial court to sign one.  That way, the plaintiff has a judgment to appeal from. Even if it's a year or more after the motion was granted. Davis v. Superior Court (City of Los Angeles), No. B230666 (Second Dist., Div. Eight, June 13, 2011).

Torts/Personal Injury Practice:  Nineteen years ago, in Knight v. Jewett (1992) 3 Cal.4th 296, the Cal Supremes pretty much reinvented the legal defense of “assumption of risk.” They held that assumption of risk was a complete defense to some personal injury actions involving sports and other rough activity involving inherent risks.  Put somewhat simplistically, the court held that the doctrine barred liability for injuries arising out of such activities, including acts or omissions that increased the risk, based on a judicial determination of 1) the nature of the activity or sport, and 2) the relationship between the parties.  So, unless the injury is inflicted intentionally, there’s usually no recovery for injuries caused by touch football games, baseball, skiing, fencing, raquet ball, etc. 

Which brings us to Nalwa v. Cedar Fair, LP, No. H034535 (Sixth Dist., June 10, 2011).  Dr. Nalwa went to Great America Amusement Park and rode the bumper cars.  The bumper cars ran into each other (Surprise!)  She broke her wrist.  She sued.  The trial court granted summary judgment on the basis of the assumption of risk doctrine.  The Court of Appeal reversed, holding the doctrine didn’t apply to bumper cars.  CBL’s prediction:  if the case doesn't settle, this goes to the Supremes and they either reverse or depublish.

Big Ol’ Product Liability Verdict:  And finally, from the Cal Biz Lit schadenfreude files, a $30 million product liability verdict in Butte County Superior Court (which used to be referred to as one of the “cow county courts”).  Design defect case against MasterCraft Boat Co. on a stability theory.  Really bad propeller injury (27 year old woman, loss of eye, frontal lobe damage, skull fracture).  Boat operator had been drinking, wasn’t legally drunk, was held for 20%.  But he’d apparently paid his $1 million policy for a covenant not to execute, meaning plaintiff intends to collect all the rest from MasterCraft.  The operator’s lawyer said he felt “vindicated.”  And in the now famous words of losing defense lawyers everywhere (and CBL has been there, done that, owns the T-shirt) MasterCraft’s attorney announced that "Obviously, we are very disappointed in the outcome," and they would explore their “appellate options.”

 

MMSEA Reporting Deadline Apparently Gets Extended Again

This is kind of weird.  For nearly a year, we've known that the revised deadilne for "RREs" (that's Medicare speak for insurers and self-insureds who have to electronically report  personal injury settlements with actual or potential Medicare recipients) was January 1, 2011.  By that date, RREs were supposed to report all settlements occuring on or after October 1, 2010.

Late last week, our friend and colleague Robbie Foster, from South Carolina's Nelson Mullins, sent me word (and a bulletin) that the Center for Medicare and Medicaid Services had just continued the compliance dates:  the reporting date was apparently moved a year, to January 1, 2012 and applied to settlements after October 1, 2011.  So we went to the CMS web site to try to find evidence of this.  But there was nothing about it on the "Overview" page.  Nothing on the "What's New" page, either.  Nor on the page for Liability and self-insureds. 

So the crack research staff at  CBL did what any careful, detail-oriented group of legal scholars would do:  put a phrase from the bulletin ("Revised Implementation Timeline for TPOC Liability") into the Google search box and touched "enter."  The result was a link, not to the CMS web site, and which, when clicked, lead to this:

Well, ok, over here at CBL, we  like to live dangerously and everything, but we still need our computers and our network to practice law, so we opted for "Get me out of here."

Next, we took the same phrase and put it in the search box at the CMS web site.  And that did indeed take us to the bulletin, located in "NGHP Alerts."  In other words, CMS took a critical bulletin, involving the Medicare / MMSEA issue that American businesses and insurers are most concerned about, and  hid it in a web site section with an acronym that nobody understands. 

In any event, that seems to be the story:

The required submission of liability insurance (including self-insurance) initial claim reports has been changed from the first calendar quarter of 2011 to the first calendar quarter of 2012 for all liability insurance (including self-insurance) TPOC amounts with no ORM involvement. Liability insurance (including self-insurance) ORM reporting is not subject to this delay.
Liability insurance (including self-insurance) TPOCs must be reported if the TPOC Date is on or after 10/1/2011.

Or at least, the deadlines are extended for companies willing to dig deep, deep and deeper into CMS's web site to try to find that information.  But NB:  this affects reporting only.  The extension does not have any impact on the obligation of plaintiffs, defendants, lawyers and everybody else to protect the interests of Medicare when they settle personal injury cases with potential Medicare involvement.  For more on this, see our white paper here.

Some Random Thoughts on Medicare Recovery

Even though it isn't exactly a California subject, we've been keeping an eye on the ramping up by companies and the Centers for Medicare and Medicaid Services (CMS) in the area of MMSEA and Medicare recovery, because of CBL's belief that MMSEA is going to change the way settlements are reached in every case involving a Medicare eligible personal injury plaintiff.  You can find previous posts, citations and a white paper  here, here, here, here, here and here.

Reporting and recovery both present uncharted waters.  Lawyers, clients, RRE's and everybody else can only hope to get as much advice as they can in the hopes that they won't miss issues.  So, with this in mind, last month I "attended" a webinar on MMSE issues put on by Risk and Insurance Management Society, Inc. called "Not Getting it Right Can Cost You:  Medicare Secondary Payer Reporting."  The presenters were Roy Franco, the Risk Management Strategies Director for Safeway and Katie Fox, Compliance & Resolution Manager for MedInsights.  While much of what they covered was introductory (and similar to what you'll find in CBL's posts and white paper), they raised some issues that I hadn't thought of before:

• A plaintiff attorney may urge his Medicare-eligible client to keep injury-related bills out of the Medicare system.  But neither the attorney, nor the plaintiff, not the defendant or its attorney can depend on this.  Providers' back offices are used to sending bills off to anyone and everyone who might pay, and inadvertant billing of Medicare is common.  So Medicare's interests have to be protected in every case where it might have made a payment.
• Once the government begins its recovery process, the communications from the government are not designed to provide much, if anything, in the way of useful information.  It isn't unusual for a large insurance company to receive an invoice from the Department of the Treasury indicating that it is for payments related to "Joseph Smith," with no other identifying information and no information as to what the claim is for.  And if it doesn't get paid within sixty days -- because nobody has any idea what it is for -- the next communication comes from the Justice Department.
• Finally, RRE's should not get to comfortable with the fact that CMS had delayed reporting until next year.  As CBL has pointed out, this delay conflicts with the statute, and it won't be at all surprising if, once the system is at least to some extent up and running, CMS directs RRE's to go back and report settlements starting July 1, 2009.

Plaintiff Bar's Position On Medicare Set-Asides

    Even though it isn't strictly a California issue, we've been following developments in the MMSEA and Medicare Cost Recovery area, with earlier posts, links and white papers here, here, here, here and here.

    Now the American Association for Justice (fka "Association of Trial Lawyers of America") wants to get its two cents in.

More after the jump.