Robinson v. State

• Decision Date: 25 April 2003
• Docket Number: No. 01-669.,01-669.
• Parties: Darlene M. ROBINSON, individually and as Personal Representative of the Estate of Donald C. Robinson, and on behalf of all others similarly situated, Plaintiff and Appellant, v. The STATE of Montana; Marc Racicot; Judy Martz, in here capacity as Governor of the State of Montana; Joseph Mazurek; Mike McGrath, in his capacity as Attorney General of the State of Montana; Laurie Ekanger; and Gail Gray, in her capacity as head of the State Department of Public Health and Human Services, Defendants and Respondents.
• Court: Montana Supreme Court

68 P.3d 750

2003 MT 110

Darlene M. ROBINSON, individually and as Personal Representative of the Estate of Donald C. Robinson, and on behalf of all others similarly situated, Plaintiff and Appellant, v. The STATE of Montana; Marc Racicot; Judy Martz, in here capacity as Governor of the State of Montana; Joseph Mazurek; Mike McGrath, in his capacity as Attorney General of the State of Montana; Laurie Ekanger; and Gail Gray, in her capacity as head of the State Department of Public Health and Human Services, Defendants and Respondents.

No. 01-669.

Supreme Court of Montana.

Argued May 28, 2002.

Submitted June 6, 2002.

Decided April 25, 2003.

Michael Cok and Michael Wheat (argued), Cok, Wheat, Brown and McGarry, Bozeman, Montana, William Rossbach, Rossbach Brennan, Missoula, Montana, for Appellant. Honorable Mike McGrath, Attorney General; Chris D. Tweeten (argued), Chief Counsel, Helena, Montana, for Respondents.

Justice W. WILLIAM LEAPHART delivered the Opinion of the Court.

¶ 1 Darlene M. Robinson (Robinson) appeals from the judgment of the First Judicial District Court, Lewis and Clark County, dismissing her complaint against the State of Montana.

¶ 2 Robinson is the personal representative of Donald C. Robinson. Robinson brought this suit to enforce her deceased husband's rights, as a Medicaid recipient, and the rights of other similarly situated Medicaid recipients, to a share of the settlement proceeds recovered by the State of Montana through its lawsuit against the tobacco manufacturers.

Background

¶ 3 Before a person can obtain Medicaid benefits in Montana, that person must meet the indigency standards set forth at § 53-6-131, MCA. A person applying for Medicaid benefits must assign "all rights" to recover health care expenses from third parties. Section 53-2-613(2), MCA. The Medicaid statutes also give the State a lien on any recovery of health care expenses from a third party. Section 53-2-612, MCA. This "lien" statute sets forth a protocol which provides that after the State has been reimbursed for all of its fees, costs, and Medicaid payments, "[t]he remainder, if any, must be paid to the [Medicaid] recipient." Section 53-2-612(3)(c), MCA.

¶ 4 Robinson and her husband qualified as indigents eligible to receive Medicaid benefits, and Mr. Robinson assigned his rights to recover health care expenses from third parties to the State of Montana. Having thus qualified for Medicaid benefits, Mr. Robinson received State medical assistance for the treatment of his tobacco-related illnesses.

¶ 5 In May of 1997, the State of Montana filed a lawsuit against five major cigarette manufacturers seeking to recover damages for increased expenses under the State Medicaid program and increased outlays for health insurance for state workers.

¶ 6 In November of 1998, the State of Montana entered into a Master Settlement Agreement (MSA) with the tobacco manufacturers. Under the MSA, over forty settling states, including Montana, are receiving payments according to a schedule set forth in the agreement. The payments will continue indefinitely as long as cigarettes are sold by the settling companies in the United States. Montana's share of the settlement proceeds was calculated, in part, based on the number of Medicaid recipients in Montana, the cost of Medicaid services in Montana and the amount Montana historically contributes to Medicaid.

¶ 7 In November 2000, Montana voters passed a ballot issue creating a constitutional trust fund into which 40 percent of the State's tobacco payments received on or after January 1, 2001, are to be paid. The income earned by the trust fund is to be used only for new public health programs to benefit the people of Montana. Art. XII, Sec. 4, Mont. Const.

¶ 8 Under the terms of the MSA, Montana released all claims it had against the tobacco manufacturers, including those it held "directly, indirectly, derivatively or in any other capacity...." Robinson argues that the claims released by the State include Mr. Robinson's claims for medical care which he assigned to the State. Robinson argues that, since her husband's claims against the tobacco manufacturers were released by the State as consideration for the MSA, his estate is entitled to participate in the settlement distribution.

¶ 9 Robinson's suit is one of more than two dozen similar suits filed in courts across the United States in which Medicaid recipients have claimed entitlement to a share of state tobacco settlement proceeds. The State points out that the courts which have addressed the merits of such claims have unanimously held that there is no legal basis for the plaintiffs' claims for settlement monies. The State asserts that there are six reasons why Robinson's claims fail as a matter of law ¶ 10 (1) The statute relied upon by Robinson, § 53-2-612(3)(c), MCA, only applies where the State through the Department of Public Health and Human Services files suit; where a county files suit; or where the individual Medicaid recipient files suit to recover damages. Robinson's suit does not come within any of these statutory categories.

¶ 11 (2) Even assuming, arguendo, that the MSA released the plaintiffs' claims, such a release would not trigger the apportionment scheme set forth in § 53-2-612(3)(c), MCA.

¶ 12 (3) Robinson's assertion that the MSA released recipients' individual claims for medical payments they made fails since the MSA defines "Released Claims" to exclude claims brought on behalf of individuals for individual damages.

¶ 13 (4) Congress has amended the Medicaid laws so that the states are free to use the payments for whatever purposes their respective legislatures may choose.

¶ 14 (5) The tobacco lawsuit settlement was not intended to confer rights on third parties such as Robinson. It was intended to prevent tobacco companies from marketing cigarettes to children and to provide compensation to the states for tax dollars expended as a result of tobacco use by their citizens.

¶ 15 (6) The State has not waived its immunity from suit for these claims. The constitutional waiver of sovereign immunity in Art. II, Sec. 18, Mont. Const., has been held to apply only to claims sounding in tort.

¶ 16 The District Court granted the State's motion to dismiss the complaint under Rule 12, M.R.Civ.P., holding that Robinson's claim for "remainder" monies is dependent upon the provisions of § 53-2-612, MCA, subsections (2) and (3). The District Court held that since the tobacco litigation was not filed by the Department or a county and was not brought in the name of the Medicaid recipient, as required by subsection (2), the apportionment provisions of subsection (3) did not come into play. The District Court further concluded that the MSA did not release any claims that the Medicaid recipients may have against the tobacco manufacturers. We agree with the District Court's analysis and affirm its decision.

¶ 17 Robinson presents the following issues for review:

¶ 18 Did the District Court err in concluding that the State's lawsuit against the tobacco manufacturers did not include assigned claims from Medicaid recipients?

¶ 19 Did the District Court err in concluding that the claims of the Medicaid recipients were not released by the State's Master Settlement Agreement with the tobacco manufacturers?

¶ 20 In reviewing an order granting a Rule 12, M.R.Civ.P., motion to dismiss, we construe the complaint in the light most favorable to the plaintiffs. The complaint may not be dismissed unless it appears that the plaintiffs are not entitled to relief under any set of facts that could be proved in support of their claims. Fennessy v. Dorrington, 2001 MT 204, ¶ 9, 306 Mont. 307, ¶ 9, 32 P.3d 1250, ¶ 9.

Discussion

¶ 21 Robinson essentially argues that the State of Montana, by entering into the MSA, released the claims for medical care that Mr. Robinson and other Medicaid recipients had previously assigned to the State. Since Mr. Robinson lost any right he had to pursue the tobacco manufacturers, Robinson (on his behalf) contends that she is entitled to the benefit of § 53-2-612(3)(c), MCA. This statute pertains to the allocation of settlement monies and provides that "[t]he remainder, if any, must be paid to the recipient." Robinson's argument is based upon an incorrect reading of both the MSA and the statute in question.

¶ 22 Section 53-2-612(1) through (3)(c), MCA, provides as follows:

(1) Upon notice by the department, a county, or the recipient to a third party or the third party's insurer as provided in subsection (5)(b), the department or county has a lien upon all money paid by a third party or the third party's insurer in satisfaction of a judgment or settlement arising from a recipient's claim for damages or compensation for personal injury, disease, illness, or disability to the extent that the department or county has paid medical assistance on behalf of the recipient for the same personal injury, disease, illness, or disability.

(2) The department or county may, in the name of the recipient on whose behalf medical assistance has been paid by the department or county, commence and prosecute to final conclusion any action that may be necessary to recover from a third party or the third party's insurer compensation or damages for medical assistance paid by the department or county on behalf of the recipient. This section does not affect the right of the recipient to initiate and prosecute to final conclusion an action for damages or compensation in the recipient's own name in accordance with the provisions of this section.

(3)(a) The lien:

(i) applies to all money paid by a third party or a third party's insurer regardless of whether the recovery is allocated by the parties or a court to any particular type or element of damages; and

(ii) is subordinate to the lien of an attorney under XX-XX-XXX.

(b) Unless specifically provided by law, the recipient's right to recover damages or compensation from a

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