Author: Rob Curran

The United States Supreme Court recently held oral arguments in a case which has very important implications for people who get healthcare from their employers. The case deals with the situation where an employee who gets hurt due to someone else’s carelessness then hires an attorney and then makes a recovery from the careless person, or their insurance company. Many employers in this situation use a federal law called “ERISA” (shorthand for the Employee Retirement Income Security Act of 1974) to take 100% of the settlement money away from their employees, regardless of how seriously they were hurt, how much medical care they may need in the future, or how much money they spent to get that recovery. Almost no one knows about this common practice until it affects them personally, and by then it’s too late to do anything about it.

The issue the Supreme Court is going to address is whether or not it’s an “appropriate equitable remedy” (the words used in the ERISA law) for an employer to take 100% of the money away from the injured employee, to reimburse the employer for the medical expenses it provided to the employee. The case is USAir v. McCutchen.

Every employee whoever had this conversation with is absolutely shocked that their employer can completely deprive them of any recovery. Unfortunately, it can occur, and it frequently does. Walmart did this to seriously brain-damaged employee back in 2008, and fought it out in court. Walmart won. It was only after a major publicity backlash that Walmart decided to give in and let its employees keep the money to pay for her ongoing healthcare. For example, see this link: http://articles.cnn.com/2008-04-02/us/walmart.decision_1_wal-mart-retail-giant-health-care-plan?_s=PM:US

I’m saddened, but not surprised, that the comments and questions from the Justices in the Supreme Court during the recent oral argument show that most of them, especially Justice Scalia, lack the sense of indignity almost everyone else experiences on a gut level when they hear about these situations. Nonetheless, it’s unclear what they will do. Hopefully, they will do the right thing and hold this kind of conduct is far from “equitable.”

Unbelievably, the Missouri Chamber of Commerce is trying to get the Missouri Legislature to pass a bill which would protect people who discriminate at work on the basis of race, sex, handicap and other illegal criteria.  The bill, called SB592, is sponsored by Republican State Senator Brad Lager.  It says, among other things, that if an employee files a lawsuit because of racial or other illegal discrimination, they are not allowed to sue the person who discriminated against them, but can only sue their employer.

Please contact your Missouri State Legislators and ask them to vote against this and any other bill that gives anyone immunity and prevents them from being held accountable for their actions.  (Here’s a link to look up who your State Senator is:  http://www.senate.mo.gov/llookup/leg_lookup.aspx)

For the Republicans, a party whose core beliefs include that people must take responsibility for their actions and be held accountable, supporting this bill flies in the face of all party values and logic.  The real reason Sen. Lager and big businesses are taking this absurd position is, of course, money.  Getting the individual out of the lawsuit completely changes the rules which will be applied to decide the lawsuit, and make it much easier for illegal discrimination to go unpunished. 

Below is an e-mail which I sent to Senator Dixon explain why the bill is unfair to Missouri citizens and why he should please vote against it:

Dear Senator Dixon,

I write to you to ask you to please vote against SB592. As an attorney who does practice in the area of employment discrimination law, I know something about this arena and the current rules which apply. I believe that you have been told SB592 is necessary for businesses to “level the playing field” or otherwise help business. That’s simply not true.

To me, there are two primary reasons why this bill should not pass. To illustrate this point, looked please consider a hypothetical example where illegal discrimination definitely occurred.

First, it is fundamentally unfair in that situation to let the person who actually committed illegal discrimination off the hook, as SB592 would. They should be forced into court as a defendant and held publicly accountable for their actions. To make sure that they and others have an incentive to not engage in this kind of conduct, they should face the risk of losing their own personal assets if they are found to have engaged in illegal discrimination. To do otherwise makes these people unaccountable.

In an age where people who are in favor of “tort reform” claim that there is no personal accountability these days, it is directly in conflict with that mantra for them to now sponsor legislation which shields individuals from being accountable for their actions, as SB592 does.

The second reason is a little bit more complicated. SB592’s sponsors’ desire to make sure these individual citizens are not named as defendants in discrimination lawsuits really has to do with businesses’ desire to “forum shop” to get the case into a more favorable court system.  They are engaging in the exact same kind of “forum shopping” that they complained about and passed new laws in 2005 to prevent. (“Forum shopping” occurs when someone tries to make sure a lawsuit gets heard in a particular location because the rules favor them and hurts the other side.)

The Missouri Supreme Court has held that in employment discrimination cases, summary judgment (which is where a judge throws out a lawsuit without trial) should only rarely be granted, primarily because it’s so frequently a “he said-she said” type of situation where a jury needs to actually listen to all of the testimony and evaluate the credibility of each person to reach a fair decision. By contrast, in Federal Court, judges are much more likely to throw out cases without ever even listening to the actual testimony of the witnesses. In employment cases, there is therefore usually a fight as to which court system to be in, because employers typically want cases held in Federal Court where judges are more likely to substitute their own judgment for a jury’s. We therefore need to look at how a case can end up in Federal Court.

Under the “diversity of citizenship” rules, a lawsuit can be removed from Missouri State court and transferred into Federal court if no person suing is from the same state as any defendant being sued.  This is called “complete diversity of citizenship” and it is required in order to transfer the case into Federal Court. If any of the defendants are from the same state as any plaintiff, complete diversity is not present and the case stays in Missouri State court.

Please consider an example. If a Missouri citizen sues both (i) her supervisor (also a Missouri citizen) and (ii) the employer (a Delaware corporation, for example) claiming sexual harassment in violation of the Missouri Human Rights Act, that case may not properly be transferred to Federal Court, since plaintiff and her supervisor are both from Missouri.

SB592’s provision that prevent the discriminated-against worker from suing her supervisor personally are designed to make sure that the case ends up in Federal Court, not Missouri State court. By preventing the supervisor (who is almost always from the same state as the people they are supervising) from being sued, this bill perversely prevents Missouri courts from getting involved in cases claiming violation of Missouri’s laws! In addition, if it were to pass, SB592 would favor out-of-state businesses over Missouri businesses, since only out-of-state businesses with workers here would be able to use their out-of-state citizenship to move cases into Federal Court.

The people who should be protected are Missouri’s citizens who have been discriminated against, not those who illegally discriminated against them.  SB592 is driven by a desire to make sure that juries never get to hear any testimony at all, and to let judges substitute their own opinion for a jury’s, despite the constitutional guarantee to a jury trial. If a particular claim or lawsuit has no merit, let the jury decide that, not an unaccountable Federal judge who holds his job for life.

My clients and I sincerely thank you for considering these thoughts as you make a decision on what to do in this matter. We put our faith and trust in you to do the right thing.

Very truly yours,

Robert D. Curran
Curran Law Firm
3516 S. National Ave.
Springfield, MO 65807
(417) 823-7500

A recent decision by a federal judge has created a lot of uncertainty about Medicare liens, so much so that Medicare temporarily halted its usual lien processing procedures. This will result in a great deal of hardship for Medicare recipients who are currently involved in litigation or claims, since finalizing the amount to be repaid to Medicare is usually a crucial aspect of settlement. Medicare and its private contractors have historically been incredibly slow at processing the paperwork it requires its recipient to submit in these situations, frequently taking 6 to 9 months or more to process paperwork which insurance companies usually process in a matter of weeks. Medicare’s decision to nationally halt its paperwork on all of these pending settlements will likely affect tens of thousands of Medicare recipients and drag out what was already an interminably long Medicare lien resolution process.

This situation arises when a Medicare recipient is injured in an incident caused by the fault of a third party and Medicare pays some or all of the medical bills related to that injury. For instance, if a Medicare recipient is involved in a car wreck caused by another driver, Medicare will frequently process and pay that person’s medical bills. In that situation, however, Medicare will not pay those bills immediately, but instead wait to see if the third party pays the bills. If they don’t, Medicare will conditionally pay them. Medicare views itself as a “secondary payor” in that situation. If the patient then files a claim against the driver who caused the collision and receives a settlement, Medicare requires that it be reimbursed for the money it spent. Congress passed laws giving Medicare certain rights of reimbursement, and Medicare has created many procedures, rules and regulations dealing with many different aspects of this situation. Medicare Secondary Payer Recovery Contractor (www.MSPRC.info) is a web site to assist the people involved in these matters understand the procedures. The Medicare regulations themselves, though, are far more complicated than a review of the web site would lead you to believe.

In particular, Medicare has regulations requiring its recipient to pay interest to Medicare if they don’t pay the money over to Medicare within 60 days of the recipient’s receiving the settlement money.

In the recent case, a federal judge in Arizona on June 4, 2011 imposed an injunction on Medicare preventing it from following some of its regulations on the grounds that those regulations exceeded the authority that Congress had given to Medicare. In addition, the judge granted class certification, meaning that the lawsuit will be pursued not only on behalf of the named parties to the suit but also other people who are similarly situated and affected by that situation. The particular situation involved in that case and directly affected by the judge’s ruling exists when a Medicare recipient appeals or contests Medicare’s decision about how much is owed. Under their rules, Medicare was requiring that recipient pay interest to Medicare starting 60 days after the recipient received the settlement money. The judge held that this is improper since the decision on the appeal would not have been issued in such a short time frame.

This decision is largely viewed in the legal community as a severe cutback on Medicare’s authority. Medicare’s lien had long been referred to in the legal community as a “super-lien,” meaning that they had much greater authority than other entities possessing liens, such as medical providers and insurance carriers. Medicare had also taken the position that the attorney for the recipient would be personally liable to Medicare if the attorney didn’t pay Medicare and instead turned the money over to the client/recipient. The judge’s opinion also held that the attorney is not liable to Medicare in that situation, overruling Medicare’s rules on that issue. That aspect of the decision is no doubt very troubling to Medicare since the threat of personal liability to the attorney was a significant factor in its efforts to force compliance.

This decision will no doubt be appealed by Medicare, and the landscape on these issues remains hazy at best. Even if the United States Supreme Court eventually gets the case and agrees with the recent decision, Medicare may appeal to Congress to pass laws giving Medicare specific authority to do what it has been doing all along. In the meantime, as is usually the case with Medicare, all we can do is wait.

Thank you, Governor Nixon, for vetoing SB188, the bill pushed through the legislature by big businesses seeking to avoid responsibility for discrimination in the workplace.  This bill was an insult to all of the hardworking people of Missouri, who would have had a much harder time proving that their employer had illegally discriminated against them.  Among other things, the bill would have made it permissible to fire someone for an illegal reason (such as age, race, etc.) as long as the employer claimed they also had a non-discriminatory reason fire them (which they always claim).

Gov. Nixon stood up and did the right thing, despite knowing that he would attacked for it by politicians trying to make it seem like the veto was “anti-job.”  The simple fact is that Missourians want fair jobs, working for people who don’t discriminate.

In addition to thanking Governor Nixon, I’d also like to thank everyone who contacted to urge him to veto this bill.

The fight’s not over yet, though.  The majority is going to try to override the veto, pretending that this bill will help workers.  It won’t.  Instead it takes away some of the few protections Missouri law gives them.

Please contact your legislators now (Republican or Democrat) and tell them that you don’t them to take away Missouri workers’ rights.  Tell them that you want them to support the working class by voting against an override of SB188!

“Missouri is a state that welcomes all people, and believes that everyone should be treated with respect and dignity,” Gov. Nixon said. “That means eliminating discrimination and removing the barriers of prejudice wherever they exist. Whether it be in the workplace, in housing or in public accommodations, discrimination is wrong. It will not be tolerated here in Missouri.”

Governor Nixon said that Senate Bill 188 would undermine key provisions of the Missouri Human Rights Act, rolling back decades of progress in protecting civil rights, encouraging fair treatment and fostering mutual understanding and respect among all citizens.

“This bill would make it harder to prove discrimination in the workplace, and would throw new hurdles in the path of those whose rights have been violated,” Gov. Nixon said. “That is unacceptable.”

The bill is opposed by a broad coalition of advocacy groups representing women, individuals with disabilities and serious illnesses, senior citizens and minorities.

“Making it easier for Missouri companies to discriminate against people with disabilities or cancer, and against women, older workers and minorities will not help us create jobs or be more competitive,” Gov. Nixon said.  “To thrive in a global economy and uphold the values we share, we must be a state that continues to move forward – not backward − when it comes to civil rights and equal opportunity.”