Glover v. Liggett Group, Inc., No. 05-14219.

• Court: United States Courts of Appeals. United States Court of Appeals (11th Circuit)
• Writing for the Court: Per Curiam
• Citation: 459 F.3d 1304
• Parties: Geneba GLOVER, James Gillins, individually as private attorneys general, or alternatively on behalf of a class of all others similarly situated, Plaintiffs-Appellants, v. LIGGETT GROUP, INC., Philip Morris USA, Defendants-Appellees.
• Docket Number: No. 05-14219.
• Decision Date: 14 August 2006

459 F.3d 1304 Geneba GLOVER, James Gillins, individually as private attorneys general, or alternatively on behalf of a class of all others similarly situated, Plaintiffs-Appellants,
v.
LIGGETT GROUP, INC., Philip Morris USA, Defendants-Appellees. No. 05-14219. United States Court of Appeals, Eleventh Circuit. August 14, 2006.

Page 1305

Robert J. Cynkar, Egan, Fitzpatrick, Malsch & Cynkar, PLLC, Vienna, VA, for Plaintiffs-Appellants.

Robert A. McCarter, III, Murray R. Garnick, Geoffrey J. Michael, Arnold & Porter, LLP, Washington, DC, Charles Cook Howell, III, Howell & O'Neal, Dana G. Bradford, II, Smith, Gambrell & Russell,

Page 1306

LLP, Jacksonville, FL, for Defendants-Appellees.

Richard Brian Rosenthal, The Law Offices of Richard B. Rosenthal, P.A., Miami, FL, for Charles E. Grassley, Amicus Curiae.

Rayford H. Taylor, Stiles, Taylor & Grace, P.A., Atlanta, GA, Jowanna Nicole Oates, Stiles, Taylor & Grace, Tallahassee, FL, Mary Ann Stiles, Robert J. Grace, Jr., Stiles, Taylor & Grace, P.A., Tampa, FL, for Associated Industries of Florida, Inc., Amicus Curiae.

Alan Edward Untereiner, Robbins, Russell, Englert, Orseek & Untereiner, Washington, DC, for Chamber of Commerce of the U.S., Amicus Curiae.

Appeal from the United States District Court for the Middle District of Florida.

Before EDMONDSON, Chief Judge, and BIRCH and ALARCÓN^*, Circuit Judges.

PER CURIAM:

Plaintiffs Geneba Glover and James Gillins filed suit against cigarette manufacturers Philip Morris USA and Liggett Group under 42 U.S.C. section 1395y(b)(3)(A) of the Medicare Secondary Payer statute ("MSP"). Plaintiffs sought to recover for the Medicare program the cost of certain health care services—"attributable to cigarette smoking"—that were rendered in Florida and allegedly caused by Defendants' tortious conduct. The district court dismissed Plaintiffs' complaint for failure to state a claim under Fed.R.Civ.Pro. 12(b)(6), concluding that section 1395y(b)(3)(A) creates no cause of action against an alleged tortfeasor whose responsibility to pay medical costs has not yet been established. We affirm.

I. Background

The Medicare Secondary Payer statute ("MSP"), which was enacted in 1980 to reduce federal health care costs, "makes Medicare the secondary payer for medical services provided to Medicare beneficiaries whenever payment is available from another primary payer." Cochran v. U.S. Health Care Financing Admin., 291 F.3d 775, 777 (11th Cir.2002). "This means that if payment for covered services has been or is reasonably expected to be made by someone else, Medicare does not have to pay. In order to accommodate its beneficiaries, however, Medicare does make conditional payments for covered services, even when another source may be obligated to pay, if that other source is not expected to pay promptly." Id.; see 42 U.S.C. § 1395y(b)(2)(A)(i). Such payment is conditioned on Medicare's right to reimbursement if a primary plan later pays or is found to be responsible for payment of the item or service. Id.

Over time, Congress has expanded the definition of "primary plan" to include a "group health plan, . . . workmen's compensation law or plan, an automobile or liability insurance policy or plan (including a self-insured plan) or no fault insurance . . . ." § 1395y(b)(2)(A) (emphasis added). In December 2003, Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act ("MMA"), which added the following sentence to the MSP's definition of a primary plan: "[a]n entity that engages in a business, trade, or profession shall be deemed to have a self-insured plan if it carries its own risk (whether by a failure to obtain insurance,

Page 1307

or otherwise) in whole or in part." § 1395y(b)(2)(A). Congress intended the MMA to apply retroactively. For purposes of this appeal, Defendants do not dispute that they qualify as "primary plans" by carrying part of their own risk.¹

To facilitate recovery of conditional payments, the MSP provides for a government action against any entity that was responsible for payment under a primary plan, 42 U.S.C. § 1395y(b)(2)(B)(iii), and subrogates the United States to the rights of a Medicare beneficiary to collect payment under a primary plan for items already paid by Medicare, § 1395y(b)(2)(B)(iv). The MSP also creates a private right of action with double recovery to encourage private parties who are aware of non-payment by primary plans to bring actions to enforce Medicare's rights. See § 1395y(b)(3)(A).

In May 2004, Plaintiffs filed suit against cigarette manufacturers Philip Morris USA and Liggett Group under section 1395y(b)(3)(A)—the MSP private cause of action—"seeking to recover for the Medicare program all the expenditures it made from May 26, 1998 to the present for health care services rendered in the State of Florida to Medicare's beneficiaries for the treatment of diseases attributable to cigarette smoking." Plaintiffs allege that these health care expenditures were caused by a battery committed by Defendants, who exposed smokers to the addictive properties of nicotine without the smokers' consent.² Plaintiffs, first, seek to use the MSP private cause of action to establish Defendants' state law tort liability for battery and, then, to recover reimbursement for payments made by Medicare on account of this tortious conduct.

Defendants moved to dismiss...