May 2006

According to the Federal Motor Carrier Safety Admininistration, in 2004, 248 people died in accidents involving large trucks in Georgia. Driver fatigue is a major cause of those wrecks, but there are insufficient safe spaces along the highways for tractor trailer drivers to pull over to sleep. The Georgia D.O.T. allows truckers to park in rest areas and off ramps to catch up on much needed rest, however, truckers say that’s not always a possiblitity.

This really doesn’t pass the “smell test.” A WV Supreme Court Justice has refused to recuse himself from a case involving a $50 million judgment against a company owned by a man who gave $3 million to help his campaign.

I have instructed my staff that if I ever write anything that provokes this kind of response from a court, just take me out and shoot me. A Bankruptcy Court Judge Leif Clark in Texas entered an order on February 21st, denying a motion on the following grounds:

The court cannot determine the substance, if any, of the Defendant’s legal argument, nor can the court even ascertain the relief that the Defendant is requesting. The Defendant’s motion is accordingly denied for being incomprehensible.

In a footnote, the judge quoted from the movie, Billy Madison:

Mr. Madison, what you’ve just said is one of the most insanely idiotic things I’ve ever heard. At no point in your rambling, incoherent response was there anything that could even be considered a rational thought. Everyone in this room is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.

The judge went on to note: “Deciphering motions like the one presented here wastes valuable chamber staff time, and invites this sort of footnote.”

This afternoon two tractor trailer wrecks tied up traffic on metro Atlanta freeways. Initial reports were scarce on details about the consequences to motorists involved in the crashes.
In Gwinnett County, tractor trailer lost its back wheels, causing a wreck that also involved a Honda Accord and possible injuries. This happened just after 4 p.m. on I-85 southbound near Hamilton Mill.
In Cobb County, a tractor trailer overturned, reportedly on four cars, on Barrett Parkway near the I-575 northbound on-ramp. Initial news reports did not include information about injuries.

At least seven people died when a tractor-trailer rig from Iowa rear-ended a pickup and both vehicles burst into flames Monday evening on Interstate 10 northwest of Tucson,AZ. The pickup was eastbound near the Pinal County line when it was hit from behind by the 18-wheeler carrying a load of copper. At least seven passengers, reportedly Mexicans, who were “jammed” into the pickup died in the burning vehicle. The dead reportedly included two adults and five children. No names were released as of late Monday. The tractor trailer driver said he did not see the pickup before the collision.

On May 1, in the case of Arkansas Dept. of Human Services v. Ahlborn, the U.S. Supreme Court held a State’s Medicaid department will be limited to reimbursement from only that portion of a judgment or settlement that represents payment for medical expenses. States are now prohibited from being reimbursed for Medicaid costs from settlement proceeds that were intended to cover items other medical expenses such as pain and suffering and wage loss. The US Supreme Court held that the federal anti-lien statute prevents States from attaching or encumbering the non-medical portion of the settlement or judgment.
In the slip opinion released May 1st, the Court stated,
“[t]here is no question that the State can require an assignment of the right, or chose in action, to receive payments for medical care. So much is expressly provided for by §§1396a(a)(25) and 1396k(a). And we assume, as do the parties, that the State can also demand as a condition of Medicaid eligibility that the recipient “assign” in advance any payments that may constitute reimbursement for medical costs. To the extent that the forced assignment is expressly authorized by the terms of §§1396a(a)(25) and 1396k(a), it is an exception to the anti-lien provision. See Washington State Dept. of Social and Health Servs. v. Guardianship Estate of Keffeler, 537 U. S. 371, 383-385, and n. 7 (2003). But that does not mean that the State can force an assignment of, or place a lien on, any other portion of Ahlborn’s property. As explained above, the exception carved out by §§1396a(a)(25) and 1396k(a) is limited to payments for medical care. Beyond that, the anti-lien provision applies.”
So what does this mean? In the U.S. Supreme Court’s own words, States may not demand reimbursement from portions of the settlement allocated or allocable to non-medical damages; instead, States are given only a priority disbursement from the medical expenses portion alone.
One obvious question is the potential for the settling parties to allocate the recovery in a way that cuts out the Medicaid interest. The Court discussed this, stating that “the risk that parties to a tort suit will allocate away the State’s interest can be avoided by either obtaining the State’s advance agreement to an allocation or, if necessary, by submitting the matter to a court for decision.” We have had experience hammering out settlements in which the settling parties submitted orders for the trial court to enter on stipulated facts approving an allocation that severely cut the Medicaid recovery basically along the lines approved by the Supreme Court on Monday.
Some folks are pushing the use of Qualified Settlement Funds (QSF) to create a breathing space between execution of a settlement with the defendant and possible purchase of a structured settlement annuity and/or creation of a special needs trust.
I also wonder whether this ruling might in any way foreshadow a future ruling on ERISA reimbursment claims. Stay tuned.