CGI v. Rose
This case is part of Public Justice’s campaign against employer-based health 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 who has been sued by her self-funded employer-based health 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 plan, CGI Technologies and Solutions, Inc., claims that Rhonda Rose must reimburse the plan for 100 percent of her medical benefits despite the fact that she paid premiums for her coverage and 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 has its way, it would walk away without paying out a penny on Rose’s policy, while she is left without full compensation for her injuries.
In February 2012, Rose’s health plan, which was administered through her employer, CGI, sued both her and her attorneys in federal court in Washington for complete reimbursement of the medical expenses her plan covered. The plan is funded under the Employee Retirement Income Security Act, a federal law that sets minimum standards for most health coverage plans in private industry. The insurer insists that, because 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 district court upheld the ERISA plan’s bid for full reimbursement, but rejected the lawsuit against her attorney as improper. In June 2012 the Ninth Circuit reversed in Rose’s favor, ruling that an employer-based insurance plan is not entitled to full reimbursement of medical claims by an injured beneficiary who recovered only a fraction of damages from the person who caused the injury. The Court of Appeals also rejected the insurer’s attempt to sue the law firm who represented Rose in her case against a third party. In U.S. Airways v. McCutchen, a case also handled by Public Justice, the Third Circuit similarly blocked a plan’s attempt to obtain 100 percent reimbursement from an injury victim.
Rose is represented by Public Justice’s Matt Wessler and Leslie Brueckner; Paul Stritmatter and Michael Withey of Seattle, Wash.; Caitlin Palacios of Washington D.C.; and Michael Nelson, also of Seattle and who represented Rose in her lawsuit against the person who injured her.
Click here to listen to the oral argument in the Ninth Circuit.