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Sonia Sotomayor on Health Care
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Insurers must pay benefits even when sued by beneficiary
On reimbursement of health insurance benefits: In 2005, Sotomayor ruled against a health insurance company that sued the estate of a deceased federal employee who received $157,000 in insurance benefits as the result of an injury.
The wife of the federal employee had won $3.2 million in a separate lawsuit from those whom she claimed caused her husband's injuries.
The health insurance company sued for reimbursement of the benefits paid to the federal employee, saying that a provision in the federal insurance plan requires paid benefits to be reimbursed when the beneficiary is compensated for an injury by a
third party. The Supreme Court upheld Sotomayor's ruling in a 5-4 opinion [on grounds that state law should prevail over federal law. Justices Breyer, Kennedy, Souter, and Alito dissented. (Empire Healthchoice Assurance, Inc. vs. McVeigh, 2005)
Source: CNN report on upcoming Sotomayor hearings
, Aug 1, 2009
Ok to collect health benefits from 2 sources for same injury.
Justice Sotomayor wrote the Court's decision on Empire HealthChoice Assurance v. McVeigh on Jun 15, 2006:
A 5-4 Court decided that federal jurisdiction does not extend to controversies over insurance contracts under the Federal Employees Health Benefits Act. Thus, state courts are the proper venue for contract disputes arising between federal employees and insurance companies, which may result in inconsistent outcomes across states.
Empire Healthchoice Assurance sued the estate of a deceased federal employee who received $157,000 in insurance benefits as the result of an injury. The wife of this federal employee had won $3.2 million in a separate lawsuit; Empire Healthchoice claimed reimbursement because the beneficiary was compensated for the same injury by a third party.
HELD:
Ginsburg, joined by Roberts, Stevens, Scalia, and Thomas
The Court ruled that under the Federal Employees Health Benefits Act, state courts, not federal courts, are the proper forum for a contracts lawsuit by a plan administrator seeking reimbursement for medical costs. Empire, the Court ruled, had not demonstrated a "significant conflict between an identifiable federal policy or interest and the operation of state law." DISSENT: Breyer, joined by Kennedy, Souter, and Alito
The dissenting opinion asserted that the dispute should have been deliberated at the federal level because, in part, "there is little about this case that is not federal."ORIGINAL HOLDING: Sotomayor
Judge Sotomayor, then on the Second Circuit prior to her Supreme Court nomination, found no federal jurisdiction because Empire failed to show that New York state law "significantly conflicts" with federal interests. The Supreme Court affirmed Sotomayor's decision.
Source: Supreme Court case 06-MCVEIGH argued on Apr 25, 2006
Congress did not intend disparate result on generic drugs.
Justice Sotomayor wrote the concurrence on PLIVA v. MENSING on Jun 23, 2011:
Plaintiffs were prescribed a brand name drug for which pharmacists substituted a generic drug, which the FDA had approved under the process federal law authorized for generics. Plaintiffs were diagnosed with a disorder linked to the extended use of the drug. They filed state tort law claims against the manufacturers of the generics, alleging failures to label their products with a warning of known risks. The generics carried the same warnings as the brand name and, the manufacturers argued, since federal regulations required the generics to have the same warnings as the brand name, compliance with a state law requiring different warnings was impossible.
HELD: Delivered by Thomas; joined by Roberts, Scalia, Kennedy & Alito
Generic manufacturers were forbidden to change unilaterally the label warning of the drug. Plaintiffs argued that the manufacturers could have complied with both state and federal law by following the process federal regulations set out of proposing
stronger warnings to the FDA (which they did not), after which the FDA might have decided to negotiate a label change with the brand name manufacturer that the generic manufacturers would have been required to adopt. The Court found that- state law required a stronger warning
- federal law prohibited a stronger warning, and
- requesting the FDA to authorize a stronger warning
was not enough to comply with state law requiring a stronger warning. Federal and state laws conflict when it is impossible to do what both laws require. It was impossible for the generic manufacturers to comply with both laws. Since federal law preempts conflicting state law, the manufacturers may not be sued on these state law claims. DISSENT: Sotomayor dissents; joined by Ginsburg, Breyer & Kagan
Congress could not have intended the result that brand name drug consumers may sue manufacturers for failure to warn, while the much larger class of generic drug consumers may not.
Source: Supreme Court case 11-PLIVA argued on Mar 30, 2011
Page last updated: Apr 29, 2013
