This case is part of Public Justice's campaign against ERISA employee benefit plans' efforts to recover medical expenses from injury victims who have recovered damages for their injuries from a third-party tortfeasor.  In CGI v. Rose, Public Justice is defending a Washington state woman – Rhonda Rose – who has been sued by her benefit plan in Washington federal court for the money it paid to cover her medical expenses after she was seriously injured in an auto accident. 

The insurance plan, CGI Technologies and Solutions, Inc., claims that Rhonda Rose, 46, must reimburse the company for 100 percent of her medical benefits despite the fact that she recovered only a small fraction of her damages in a lawsuit against the person who caused the accident due to the defendant’s low insurance limits.  If the company succeeds, it will walk away without paying out a penny on Ms. Rose’s policy, while she is left without full compensation for her injuries.
 
In February, Ms. Rose’s health insurance plan, which was administered through her employer, CGI Technologies and Solutions, Inc., sued both her and her attorneys in federal court in Washington for complete reimbursement of the medical expenses her insurance policy covered.  The plan is funded under the Employee Retirement Income Security Act (“ERISA”), a federal law that sets minimum standards for most health insurance plans in private industry.  The insurer insists that, because Ms. Rose received some compensation from the person who injured her, it is entitled to get all of its money back -- before Rose or the attorney who won her compensation are entitled to anything.
 
The lawsuit is part of a nationwide campaign by insurance companies seeking to exploit a 2006 U.S. Supreme Court decision – Sereboff v. Mid Atlantic Medical Services – that allows health insurance plans to seek reimbursement for medical expenses from injured employees who receive compensation from a third party.    

Before that decision, many courts held that insurance plans could not pursue reimbursement -- or “subrogation” -- because they had already been paid premiums to cover employees’ medical expenses for accident-related injuries. 
 
If the person who caused the accident was later held accountable, the money went to the injury victim, not the insurance company.  In Sereboff, however, the U.S. Supreme Court held that, given the presence of certain plan language, insurance plans could seek some reimbursement for medical expenses from injured employees who obtained compensation for injuries caused by third parties.  What Sereboff did not decide is the extent of reimbursement the insurance companies are entitled to require injured employees to repay.
 
Now insurance companies are insisting that, whenever injury victims receive any compensation from a third party, they must repay all of their medical expenses first -- even if they owe others for uncovered expenses and have only obtained partial compensation for their injuries.  Under some circumstances, this leaves injured employees worse off -- and insurance companies better off -- than if the employees had received no compensation in the first place.
                                     
Rhonda Rose is represented by Public Justice’s Budd-Kazan Attorney Matthew Wessler and Senior Attorney Leslie Brueckner; Paul Stritmatter and Michael Withey of Seattle, Washington; Caitlin Palacios of Washington D.C.; and Michael Nelson of Seattle, Washington, who represented Ms. Rose in her lawsuit against the person who injured her.  Michael Nelson’s law firm, Nelson Langer Engle PLLC, has also been named as a defendant in the case.

Click here to listen to the oral argument in the Ninth Circuit.

Briefs and Documents

Third Brief on Cross Appeal (August 19, 2011)

First Brief on Cross Appeal (May 23, 2011)

District Court Opinion, Western District of Washington (January 19, 2011)

Reply Brief (January 18, 2011)

Brief in Support of Motion for Summary Judgment (November 30, 2010)

Complaint (March 4, 2010) 

Discovery Materials:

     Stipulation (October 19, 2010)

     First Set of Interrogatories (September 22, 2010)

     Second Set of Interrogatories (September 21, 2010)

     Requests for Production (September 17, 2010)