Lopes v. Commonwealth

• Decision Date: 05 March 2004
• Citation: 442 Mass. 170,811 NE 2d 501
• Parties: EVA LOPES, coadministratrix, & others v. COMMONWEALTH.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

442 Mass. 170

811 NE 2d 501

EVA LOPES, coadministratrix,¹ & others² v. COMMONWEALTH.

Supreme Court of Massachusetts, Suffolk.

March 5, 2004.

July 9, 2004.

Present: MARSHALI., C.J., GREANEY, IRELAND, SPINA, COWIN, SOSMAN, & CORDY, JJ.

Albert L. Farrah, Jr., for the plaintiffs.

William W. Porter, Assistant Attorney General, for the Commonwealth.

SPINA, J.

The plaintiffs are personal representatives of the estates of Massachusetts residents who received free medical care during their lives under the Commonwealth's Medicaid program, G. L. c. 118E, §§ 15 et seq. In this action, the plaintiffs seek to enjoin the Commonwealth from recovering the cost of that care from their decedents' estates or, where the money has already been recovered, to require the Commonwealth to return the funds. The plaintiffs base their claim on the premise that their decedents received such care for tobacco-related illnesses, and the Commonwealth already has recovered the cost of that care from settlement of its litigation against various manufacturers of tobacco products. The plaintiffs argue that recovery from the decedents' estates would amount to double recovery and unjust enrichment, as well as violation of various State and Federal statutory and constitutional provisions. The Commonwealth filed a motion to dismiss the complaint under Mass. R. Civ. P. 12 (b) (1) and (6), 365 Mass. 754 (1974), on grounds of (1) sovereign immunity; (2) waiver as to amounts already recovered, where there had been no objection to recovery within the time provided in G. L. c. 118E, § 32; and (3) failure to state a claim for relief under (a) common-law principles of unjust enrichment, (b) G. L. c. 118E, §§ 15 et seq., (c) the equal protection clause of the United States Constitution, or (d) the Federal and State civil right acts. A judge in the Superior Court determined that the plaintiffs' claims were barred by sovereign immunity and ordered the complaint dismissed. The plaintiffs appealed, and we transferred the case here on our own motion. We affirm the judgment, but for reasons based on the plaintiffs' failure to state a claim, as well as sovereign immunity.

1. Background. We summarize the facts set forth in the complaint.³

Medicaid, Title XIX of the Social Security Act, 42 U.S.C. §§ 1396 et seq. (2000), is a Federal program in which participating States are reimbursed payment of medical services made on behalf of eligible low-income individuals. Massachusetts is a participating State. See G. L. c. 118E, § 15. As a condition of Federal reimbursement, participating States are required to institute and operate an estate recovery program designed to recover from the estates of certain Medicaid recipients the costs of certain nursing facility and other long-term care services paid on their behalf. See 42 U.S.C. §§ 1396a(a)(18), 1396p(a), (b); G. L. c. 118E, §§ 31 et seq.

Participating States also are required to "take all reasonable measures to ascertain the legal liability of third parties . . . to pay for care and services available under the [State's Medicaid] plan." 42 U.S.C. § 1396a(a)(25)(A). Participating States must seek reimbursement from liable third parties where the State can reasonably expect to recover an amount greater than the cost of pursuing such recovery. See 42 U.S.C. § 1396a(a)(25)(B); G. L. c. 118E, § 22. The Federal government and participating States share the net amount of Medicaid payments recovered from third parties. See 42 U.S.C. § 1396b(d)(3)(A). A State's Medicaid plan must require recipients to assign to the State their right to recover payment for medical care from any liable third party, and to cooperate with the State in pursuing recovery from any liable third party. See 42 U.S.C. § 1396a(a)(25)(A), (B).

Consistent with the Commonwealth's obligation to pursue reimbursement from liable third persons, the Attorney General brought a direct action⁴ in 1995 in the name of the Commonwealth (including the division of medical assistance) against various manufacturers of tobacco products. The amended complaint, captioned Commonwealth of Massachusetts vs. Philip Morris Inc., Middlesex Superior Court No. 95-7378, sought equitable relief to enjoin the manufacturers of tobacco products from engaging in certain unfair or deceptive acts and practices in trade or commerce, including deceptive advertising of tobacco products, and to require them to disclose their internal research on smoking, health, and addiction, and machine-tested nicotine yields of their products. The amended complaint also sought monetary damages arising out of the adverse health consequences of cigarette smoking, including (1) restitution for health care expenses incurred under the Medicaid program, (2) funding for a "corrective public education campaign" related to smoking, health, and addiction, and (3) funding for "smoking cessation programs." Finally, the amended complaint also sought damages, civil penalties, attorney's fees and costs under the Consumer Protection Act, G. L. c. 93A, §§ 2 (a), 4, and 9, for deceptive advertising of tobacco products, the systematic suppression and concealment of material information about the consequences of cigarette smoking, and other unfair or deceptive acts or practices in trade or commerce.

The Commonwealth's claims against the manufacturers of tobacco products were based on common-law theories of fraud, misrepresentation, breach of warranty, public nuisance, conspiracy, and undertaking of special duty; G. L. c. 93A, §§ 4⁵ and 9; G. L. c. 118E, § 22⁶; and St. 1994, c. 60, § 276.⁷ A judge in the Superior Court dismissed the common-law counts to the extent that they purported to state claims independent of the statutory claims.

In 1998, the Commonwealth's lawsuit against the manufacturers of tobacco products was settled as part of a nationwide settlement of similar claims by all fifty States, the District of Columbia, and five territories. Four States entered into individual settlement agreements with the manufacturers of tobacco products. The others, including Massachusetts, entered into a master settlement agreement. Under the terms of the master settlement agreement the manufacturers of tobacco products, without admitting liability or wrongdoing, agreed to pay the States approximately $240 billion over twenty-five years, plus $8.3 billion annually thereafter, in perpetuity. The Commonwealth had received $300 million as of the filing of the plaintiffs' complaint. It expects to receive approximately $8 billion over twenty-five years, and it further expects to receive $300 million annually thereafter, in perpetuity. None of the payments under the master settlement agreement is earmarked for any particular purpose or tied to any particular claim or type of claim.

The Commonwealth has sought, and in certain cases already has received, reimbursement from the estates of the plaintiffs' decedents for medical and hospital care made in connection with the decedents' alleged tobacco-related illnesses, under the Commonwealth's estate recovery program, G. L. c. 118E, § 31. The plaintiffs allege that because the Commonwealth already has recovered, and will recover, monies from the tobacco product manufacturers for Medicaid payments made on behalf of their decedents and persons similarly situated,⁸ there is no basis for seeking what amounts to a double recovery under the estate recovery program for the same payments. They seek declaratory and injunctive relief to prevent the Commonwealth from proceeding under its estate recovery program against the estates of persons who have died or will die of tobacco-related illnesses. They also seek a judgment against the Commonwealth to recover funds collected under its estate recovery program from the estates of persons who have died of tobacco-related illnesses.

2. Sovereign immunity. The Commonwealth contends that all the plaintiffs' claims are barred by principles of sovereign immunity. The plaintiffs claim that sovereign immunity is not a defense because the Commonwealth recovered the monies in the tobacco litigation while acting in its capacity as subrogee of the plaintiffs' decedents or, alternatively, that sovereign immunity does not apply to actions in contract or to claims raised in a contractual setting.

Sovereign immunity bars a private action against a State in its own courts absent consent by the Legislature or abrogation of sovereignty by Congress acting under its Fourteenth Amendment powers. See Alden v. Maine, 527 U.S. 706, 745, 754-756 (1999); Woodbridge v. Worcester State Hosp., 384 Mass. 38, 42 (1981). "Consent to suit must be expressed by the terms of a statute, or appear by necessary implication from them." Id. "[W]hen that consent is granted, [the Commonwealth] can be impleaded only in the manner and to the extent expressed in the statute." Glickman v. Commonwealth, 244 Mass. 148, 149 (1923).

The Legislature has not authorized a suit against the Commonwealth to recoup money that allegedly has been wrongfully recovered under the estate recovery program, G. L. c. 118E, § 31. The plaintiffs' only remedy under the estate recovery program is found in G. L. c. 118E, § 32, which provides a procedure by which an executor or administrator may disallow a claim by the Commonwealth, or assert the existence of "circumstances and conditions where the division [either] is required to defer recovery under [§ ] 31 . . . or . . . will waive recovery for undue hardship under its regulations." G. L. c. 118E, § 32 (d). If the Commonwealth (division) receives notice of disallowance, it must commence action to enforce its claim within sixty days of receipt of such notice. See G. L. c. 118E, § 32 (f). That the statute provides an express form of relief from sovereign immunity is an indication that the Legislature did not intend to waive immunity as to other forms of relief. See Broadhurst v. Director of the Div. of Employment Sec., 373 Mass. 720, 727 (1977); General Elec. Co....