Tuesday, May 3, 2016

Judge Mariani Remands Issue Regarding Carrier's Demand for Final Medicare Lien Letter Before Payment of Settlement Funds

In a decision handed down in the Federal Middle District Court of Pennsylvania case of Mikiewicz v. Hamorski and Erie Insurance Exchange, No. 3:15-CV-02426 (M.D.Pa. May 3, 2016 Mariani, J.), Judge Robert D. Mariani granted a Plaintiff's Motion for Remand in a case involving a carrier's demand that the Plaintiff secure and produce a final lien letter from Medicare prior to any need by the carrier to issue a settlement payment following a motor vehicle accident.

This matter was originally filed by the Plaintiff in the Lackawanna County Court of Common Pleas as a Petition assterting that the carrier's requirement that the Plaintiff satisfy certain conditions as part of the settlement, i.e. produce a final lien letter from Medicare, violated Pa.R.C.P. 229.1 which requires that settlement proceeds be paid within twenty days of the execution of a Release.

The Plaintiff followed that Petition with a Motion to Enforce the Settlement in the state court.  The same day that Motion was argued, the carrier filed an Answer to the Motion and also filed paperwork to remove the case to federal court.

The carrier asserted that removal was proper given that Plaintiff's claim involved a federal statute, the Medicare Secondary Payer Act ("MSPA"), thereby giving rise to federal question jurisdiction.  The carrier also asserted that removal was appropriate because the MSPA is an extraordinary statute that completely pre-empted state law.

The Plaintiff responded by filing the federal court Motion to Remand at issue.  As noted, the court granted the Plaintiff's Motion.

Judge Robert D. Mariani
M.D. Pa.
In so ruling, Judge Mariani found that the Plaintiff's claims did not arise under Federal law as asserted by the carrier.  Rather, the court found, the carrier raised federal law as a defense to the Plaintiff's claims.  The court noted that a defendant can not transform a matter into a federal question case by injecting a federal law defense into the matter for purposes of the removal issue.

Judge Mariani also rejected the carrier's contention that the MSPA completely preempted State law.  The court reviewed the "complete pre-emption doctrine" and found that the elements of that doctrine had not been met under circumstances presented in this matter.  Judge Mariani cited to several Third Circuit decisions holding that a state law cause of action that references or involves the MSPA or the Medicare statute is not removable to federal court because it does not raise a federal question.

Accordingly, the court granted the Plaintiff's Motion for Remand and sent the case back to state court.  In so ruling, the court also granted attorney's fees, costs and expenses after finding that the carrier lacked an objectively reasonable basis for the removal.  The court noted that not only had the carrier failed to cite case law in support of the removal, the court also pointed out that the carrier had been repeatedly sanctioned in the past for making similar unsuccessful arguments regarding the MSPA.

Anyone wishing to review Judge Mariani's opinion in Mikiewicz may click this LINK.

I send thanks to the prevailing Plaintiff's attorney Paul Oven of the Moosic, PA office of Dougherty, Leventhal & Price for bringing this case to my attention.

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