Federal court decertifies status of cigarette lawsuit
National News
The US Court of Appeals for the Second Circuit Thursday overturned class action certification for a lawsuit brought by "light" cigarette smokers against Philip Morris USA Inc., R.J. Reynolds Tobacco Co. and other light cigarette makers. The class action, which included anyone who has ever bought light cigarettes since they hit the market in the 1970s, had alleged that tobacco companies used deceptive advertising tactics to mislead smokers in response to growing health concerns over the risks of smoking cigarettes. Attorneys for the tobacco companies argued that determining why every light cigarette consumer bought the product would be impossible and therefore made class certification impractical.
In September 2006, Judge Jack B. Weinstein of the United States District Court in Brooklyn certified the class of 50 million plaintiffs for the class-action suit. Lawyers estimated that sales of light cigarettes brought tobacco companies between $120 billion and $200 billion in extra sales since 1971.
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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.