Court overturns tobacco company victory over FDA on menthols

Headline Legal News

A federal appeals court has ruled that tobacco companies had no basis to challenge a Food and Drug Administration report on menthol cigarettes, which the industry alleged was written by experts with conflicts of interest.

The decision by a three-judge panel overturns a lower court ruling that barred the FDA from using the report and ordered the agency to reform its committee of tobacco advisers.

The 2011 report from the agency's Tobacco Products Scientific Advisory Committee concluded that menthol flavoring leads to increased smoking rates, particularly among teens, African Americans and those with low incomes. The report said removing the flavoring would make it easier for some smokers to quit.

Cigarette makers Lorillard Inc. and Reynolds American Inc. sued the agency, alleging conflicts of interest by several members who had previously testified against tobacco companies in court.

But Judge Stephen Williams, writing for the court, states that the companies had no legal basis to challenge the makeup of the committee. Williams rejected company arguments that they could be damaged by the apparent conflicts as "too remote and uncertain." The opinion was issued Friday in the U.S. Court of Appeals for the District of Columbia Circuit.

Despite the victory for the federal government, the ruling may have limited impact on the FDA or its panel. Last year the FDA announced that four members of its tobacco products advisory panel had either resigned or were removed, following the previous court ruling against the agency.

In 2013, the FDA conducted its own review of menthol cigarettes, concluding they pose a greater public health risk than regular cigarettes. But it did not make a recommendation on whether to limit or ban them.

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Workers’ Compensation Subrogation of Administrative Fees and Costs

When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.

In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.

In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.

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