The Legal Intelligencer PA Justice News/October 2011 : Page 1

PA NEWS JUSTICE OCTOBER 2011 1617 JFK Boulevard, Suite 1750 Philadelphia, PA 19103 Forwarding & Return Postage Guaranteed Address Correction Requested Periodicals Postage VOLUME IV • NO. 4 Watchword: Vigilance Kenneth M. Rothweiler, Esq. krothweiler@pajustice.org If you thought the repeal of joint and several liability was the end of the anti-civil justice crusade in Harrisburg, think again. By intro-ducing nearly 20 anti-civil justice bills, certain Harrisburg legislators have thrown more fuel on the flame that threatens to consume our clients’ rights. Some of the more harmful bills would cap damages, immunize sellers of defective prod-ucts, compel arbitration in medical malprac-tice actions, and double the captive period in workers’ compensation cases. (See page 10 for a list of bills in our state legislature). While I am not pulling the fire alarm and suggesting these bills are sure to become law, I want to emphasize that we have a responsibil-ity to our clients to be vigilant and vocal about INSIDE Our Road is Steep, But We Have the Horsepower .........................................3 AAJ State Delegate Report — H.R. 5 and H.R. 1063 .................................. 3 Interview with the Hon. Arnold L. New ....4 Joint & Several Abolition’s Unintended Consequences ............................................5 3 Easy Ways to Help Your Clients and Career .................................................7 Lookout: Nearly 20 anti-civil justice bills have been introduced in our state Legislature. Damn the Tort Reformers, Full Speed Ahead .........................................................7 Legislative Update ...................................10 Annual Retreat Photo Album .................11 Case Notes Products Liability ................................12 Commerical Litigation ........................13 Insurance Bad Faith ............................17 Automobile Law .................................18 CLE Fall Schedule .....................................20 what is in the Harrisburg pipeline. Inform your clients, colleagues, and friends about what we may be facing in the coming years. The more people who understand the damage these bills can do, the harder it will be for these bills to become law. While these bills are introduced under the euphemism of “tort reform” , they are wholly unnecessary because the so called “law suit crisis” has long been declared over by the prior Governor and the current Chief Justice of the Pennsylvania Supreme Court. The only justification for bills of this ilk is to insulate irresponsible wrongdoers from the consequences of their actions. If enacted, the result will not be a boon to Pennsylvania’s economy. The result will be an ever greater burden on our health and welfare system for victims who are unable to obtain justice in the courtroom. You can be sure that the anti-civil justice majority in Harrisburg continues to view us and our current and future clients as obstacles to their agenda. But you can be equally sure that your association leadership is at least as passionate about protecting against the fur-ther destruction of your clients’ rights. The repeal of joint and several liability is not the end. The coming years will see more objec-See “ VIGILANCE ” on Page 10 LAWPAC Commitment THANK YOU to the following members who demonstrated their commitment to civil justice with their monthly support of LAWPAC. (As of 8/11/2011) NEW OR REINSTATED DONORS Thomas S. Cook – SchmidtKramer, P.C. Brian E. Fritz – Saltz Mongeluzzi Barrett & Bendesky, P.C. Dana M. Klayman – Cooper & Schall, P.C. David J. Langsam – Saltz Mongeluzzi Barrett & Bendesky, P.C. Melissa N. Leininger – SchmidtKramer, P.C. Adam Pantano – Saltz Mongeluzzi Barrett & Bendesky, P.C. Robert William Zimmerman – Saltz Mongeluzzi Barrett & Bendesky, P.C. UPGRADED DONORS Kila Baldwin – Kline & Specter, P.C. Jason E. Matzus – Raizman Frischman & Matzus, P.C. Jason L. Pearlman – Kline & Specter, P.C. David S. Senoff – Caroselli Beachler McTiernan & Conboy MEDICAL MALPRACTICE Tristani Ruling: DPW Can Lien On You John P. Gismondi, Esquire jpg@gislaw.com On June 29th, the Third Circuit Court of Appeals in Tristani v. Richman reversed the trial court and said the Department of Public Welfare (DPW) does indeed have a lien against third party recoveries. While others know the case better than I, here is my take on the decision. In the appeal, the Circuit tried to reconcile two conflicting parts of the Social Security Act that established the Medicaid program. One part of the Act requires states to “seek reimbursement” for medical assistance paid, whereas another part contains the so-called anti-lien language which says Medicaid can-not put a lien against property of the Medic-aid recipient. The issue in the case was whether the Pennsylvania statute which permits liens on behalf of DPW is in violation of this anti-lien language. 1 The Circuit found that the context and his-tory of the Social Security Act compels the conclusion that states are allowed to impose liens, otherwise plaintiffs would receive windfalls. In examining the Act’s legislative history, the Court found that the anti-lien/anti-recov-ery language dated back to 1960, before the creation of Medicaid. Back then, if a state paid the elderly’s medical expenses the gov-ernment was barred from asserting liens against their property to recoup the cost. 2 The purpose of this bar was to protect the Social Security recipient’s homestead. But in 1967, a few years after Medicaid came into being, Congress added language which required states to ascertain liable third parties and seek reimbursement from them. Seen in that context, the Circuit said that “We cannot agree that Congress intended these provisions to prohibit states from plac-ing liens on recoveries from liable third par-ties, especially in light of the reimbursement and forced assignment provisions it later added to the Social Security Act [in 1967].” 3 Having determined that liens are valid, the Circuit then examined the validity of Pennsyl-vania’s method of apportioning settlements, i.e. deciding what part of the settlement is subject to the lien. Pennsylvania law discusses allocation in 62 P.S. §1409(b)(11) which says that the entire settlement amount is subject to the lien but in no event will DPW claim more than one-half. This is the so-called “default rule” of allo-See “ TRISTANI ” on Page 15

Watchword: Vigilance

Kenneth M. Rothweiler, Esq.

If you thought the repeal of joint and several liability was the end of the anti-civil justice crusade in Harrisburg, think again. By introducing nearly 20 anti-civil justice bills, certain Harrisburg legislators have thrown more fuel on the flame that threatens to consume our clients’ rights.<br /> <br /> Some of the more harmful bills would cap damages, immunize sellers of defective products, compel arbitration in medical malpractice actions, and double the captive period in workers’ compensation cases. (See page 10 for a list of bills in our state legislature).<br /> <br /> While I am not pulling the fire alarm and suggesting these bills are sure to become law, I want to emphasize that we have a responsibility to our clients to be vigilant and vocal about What is in the Harrisburg pipeline.<br /> <br /> Inform your clients, colleagues, and friends about what we may be facing in the coming years. The more people who understand the damage these bills can do, the harder it will be for these bills to become law.<br /> <br /> While these bills are introduced under the euphemism of “tort reform”, they are wholly unnecessary because the so called “law suit crisis” has long been declared over by the prior Governor and the current Chief Justice of the Pennsylvania Supreme Court.<br /> <br /> The only justification for bills of this ilk is to insulate irresponsible wrongdoers from the consequences of their actions. If enacted, the result will not be a boon to Pennsylvania’s economy. The result will be an ever greater burden on our health and welfare system for victims who are unable to obtain justice in the courtroom.<br /> <br /> You can be sure that the anti-civil justice majority in Harrisburg continues to view us and our current and future clients as obstacles to their agenda. But you can be equally sure that your association leadership is at least as passionate about protecting against the further destruction of your clients’ rights.<br /> <br /> The repeal of joint and several liability is not the end. The coming years will see more objec- Tionable legislation. As an association and as professional advocates we must be vigilant and vocal about Harrisburg’s plans. Please expect to be alerted by me directly or through the association as events warrant.<br /> <br /> Anti-Civil Justice Bills In Our State Legislature<br /> <br /> HB. 184 Creating specialty courts for medical malpractice actions<br /> <br /> HB. 301 Capping damages in medical malpractice actions (requires amending Pennsylvania Constitution) <br /> <br /> HB. 304 15 year statute of repose in all product liability cases <br /> <br /> HB. 388 Protecting the “product seller” in product liability actions <br /> <br /> HB. 495 Inadmissibility of “benevolent gesture” or admission of fault in medical malpractice actions <br /> <br /> HB. 803 Essentially adopting the third restatement of torts in product cases <br /> <br /> HB. 808 Amending Workers Compensation Act: Doubling period of time that employee must be treated by employer designated Health care provider from 90 to 180 days.<br /> <br /> HB. 1419 Certificate of Merit in all professional liability actions <br /> <br /> HB. 1495 Limiting liability of landowners who invite public for recreational use <br /> <br /> HB. 1552 All personal injury cases may only be filed in the county in which the cause of action arose <br /> <br /> SB. 383 Immunity for seller of defective products <br /> <br /> SB. 384 Statute of repose in product liability actions <br /> <br /> SB. 565 Inadmissibility of benevolent gesture or admission of guilt <br /> <br /> SB. 949 Physician immunity for disclosures on controlled substances <br /> <br /> SB. 999 Mandatory arbitration for medical negligence cases <br /> <br /> SB. 1029 Immunity for hosts inviting public on recreational land<br /> <br /> Kenneth M. Rothweiler serves as President of the Pennsylvania Association for Justice. He is happy to receive your comments, criticisms or thoughts by email krothweiler@pajustice.org or by phone 215.546.6636.

Medical Malpractice Tristani Ruling: DPW Can Lien On You

John P. Gismondi, Esquire

On June 29th, the Third Circuit Court of Appeals in Tristani v. Richman reversed the trial court and said the Department of Public Welfare (DPW) does indeed have a lien against third party recoveries. While others know the case better than I, here is my take on the decision.<br /> <br /> In the appeal, the Circuit tried to reconcile two conflicting parts of the Social Security Act that established the Medicaid program. One part of the Act requires states to “seek reimbursement” for medical assistance paid, whereas another part contains the so-called anti-lien language which says Medicaid cannot put a lien against property of the Medicaid recipient.<br /> <br /> The issue in the case was whether the Pennsylvania statute which permits liens on behalf of DPW is in violation of this anti-lien language.1<br /> <br /> The Circuit found that the context and history of the Social Security Act compels the conclusion that states are allowed to impose liens, otherwise plaintiffs would receive windfalls.<br /> <br /> In examining the Act’s legislative history, the Court found that the anti-lien/anti-recovery language dated back to 1960, before the creation of Medicaid. Back then, if a state paid the elderly’s medical expenses the government was barred from asserting liens against their property to recoup the cost.2 The purpose of this bar was to protect the Social Security recipient’s homestead. But in 1967, a few years after Medicaid came into being, Congress added language which required States to ascertain liable third parties and seek reimbursement from them.<br /> <br /> Seen in that context, the Circuit said that “We cannot agree that Congress intended these provisions to prohibit states from placing liens on recoveries from liable third parties, especially in light of the reimbursement and forced assignment provisions it later added to the Social Security Act [in 1967].”3 <br /> <br /> Having determined that liens are valid, the Circuit then examined the validity of Pennsylvania’s method of apportioning settlements, i. e. deciding what part of the settlement is subject to the lien.<br /> <br /> Pennsylvania law discusses allocation in 62 P.S. §1409(b)(11) which says that the entire settlement amount is subject to the lien but in no event will DPW claim more than onehalf. This is the so-called “default rule” of allo- Cation which applies unless the court orders otherwise. The Circuit found that this method for allocating settlements, including the regulation allowing plaintiffs to seek court allocation, is fair.4<br /> <br /> As a result of this ruling, we are now back to “business as usual,” i.e. DPW has a lien, and it does not have to intervene to recoup it. If plaintiffs disagree with DPW about how much of the settlement represents recovery of medical expense, they can go to court for an allocation.<br /> <br /> 1 The U.S. Supreme Court in Ark. Dep’t of Human Servs. V. Ahlborn, 547 U.S. 268, 126 S. Ct. 1732 (2006), assumed, without deciding, that state statutes which permit liens constitute an exception to the federal anti-lien law, but that was dictum.<br /> <br /> 2 The government could, however, assert a lien against their estate once the recipient died.<br /> <br /> 3 Judge Conti in the District Court had viewed the 1967 “forced assignment” language as granting rights to the state but they had to vindicate those rights by intervening rather than asserting a lien.<br /> <br /> 4 In this case, the plaintiffs argued that they had received settlements for less than full value, and thus, the lien should be reduced accordingly. Judge Conti said that Pennsylvania law presumes that a settlement represents full value, but the Circuit did not reach this issue.<br /> <br /> John Gismondi is founder of Gismondi & Associates, Pittsburgh. He is Chair of PAJ’s Medical Malpractice Section and a President’s Club Member.

Covered Bridge Capital

 

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