910 F. Supp. 2d 690
S.D.N.Y.2012Background
- Meek-Horton filed a putative class action in NY Supreme Court on Aug 1, 2011 against 40 Medicare Advantage insurers for MA Plans.
- Defendants removed the action to federal court under CAFA on Aug 29, 2011.
- An Amended Complaint was filed Oct 7, 2011; many defendants were dismissed from the action, leaving 15 defendants.
- The remaining Defendants moved to dismiss under Rule 12(b)(1) for lack of subject matter jurisdiction or under Rule 12(b)(6) for failure to state a claim.
- Plaintiffs allege MAOs’ reimbursement actions against settlements from third-party tortfeasors violate NY Gen. Oblig. Law § 5-335 and seek restitution and a permanent injunction.
- The dispute centers on whether Medicare Part C preempts GOL § 5-335, thereby preventing state-law reimbursement claims against MAOs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Medicare Part C preempt GOL § 5-335(a)? | Meek-Horton argues MAOs lack a federal right to reimbursement and GOL § 5-335 should govern. | Defendants contend Part C preempts state law to the extent it would extinguish MAOs’ reimbursement rights. | Yes; Part C preempts GOL § 5-335 to the extent it would bar MAOs’ reimbursement rights. |
| Do MAOs have a statutory right of reimbursement under Part C preempting GOL § 5-335? | MAOs lack a statutory right of reimbursement under Part C. | Part C expressly provides for MAOs to recover or be subrogated, creating a federal right of reimbursement. | Part C provides a statutory right of reimbursement that preempts GOL § 5-335. |
Key Cases Cited
- Makarova v. United States, 201 F.3d 110 (2d Cir. 2000) (burden on plaintiff to prove subject-matter jurisdiction by preponderance of evidence)
- CSX Transp., Inc. v. Easterwood, 507 U.S. 658 (1993) (Supremacy Clause preemption analysis and focus on plain language of express preemption clause)
- Potts v. Rawlings Co., LLC, 897 F. Supp. 2d 189 (S.D.N.Y. 2012) (Part C preemption of state-law claims; exhaustion considerations discussed in preemption context)
- Uhm v. Humana, Inc., 620 F.3d 1134 (9th Cir. 2010) (Part C preemption broad interpretation; savings clause not indicating preservation of state-law claims)