Other Health-Care Cost Recovery & Aggregated Cases

Although the Master Settlement Agreement (MSA) settled some health-care cost recovery actions, other types of plaintiffs have brought similar cases. Unions, groups of health-care insurers, a private entity that purported to self-insure its employee health-care programs, Native American tribes, hospitals, universities and taxpayers have advanced claims comparable to those found in governmental health-care cost recovery actions.

Union Cases

Shortly after state attorneys general began to file health-care cost recovery cases, various unions, through their trust funds, also sued the tobacco industry to recover health-care costs. The first and only union case to go to trial was Iron Workers Local No. 17 v. Philip Morris, Inc., which was tried to a unanimous defense verdict in federal court in Ohio. The remainder of smiliar cases filed against the company were dismissed.

Insurance Cases

In Blue Cross and Blue Shield of New Jersey, Inc. v. Philip Morris, Inc., a federal court jury in Brooklyn, N.Y., returned a June 6, 2001, verdict in favor of R.J. Reynolds Tobacco Company and other tobacco defendants on common law fraud and civil RICO claims, but found for the plaintiff on a claim under the state's deceptive business practices statute. On Dec. 22, 2004, the United States Court of Appeals for the Second Circuit reversed the judgment in favor of the plaintiff under the state's deceptive business practices statute. On Feb. 1, 2005, the parties stipulated to the dismissal with pejudice.

Other Cases

On August 4, 2005, the United Seniors Association filed a case against the major U.S. cigarette manufacturers, including R.J. Reynolds Tobacco Company and B&W, in the United States District Court for the District of Massachusetts. The plaintiff is bringing the action as a "private attorney general" pursuant to the private cause of action provisions of the Medicare as Secondary Payer statute. The case seeks to recover for the Medicare program all of the expenditures that the Medicare program made from August 4, 1999, to present for the health care services rendered to Medicare's beneficiaries for the treatment of diseases attributable to smoking including, but not limited to, coronary heart disease, chronic obstructive pulmonary disease, lung cancer, emphysema, peripheral vascular disease and atherosclerosis.

Our Viewpoint

• Virtually all courts have rejected third-party health-care reimbursement claims, ruling that the plaintiffs lack standing to sue because claims by the third-party payers are too "remote" from any alleged injuries. (Claims have to be brought by the person who has the disease, not by the hospital, insurance company, union trust fund or any others who pay part of the individuals' medical expenses).
• Each federal appellate court that has addressed the issue (the 2nd, 3rd, 5th, 7th, 8th, 9th, 11th, and D.C. Circuits) has confirmed that these types of cases are not legally appropriate.