High court sides with Goodyear in sanctions dispute
National News
A unanimous Supreme Court is siding with Goodyear Rubber & Tire Co. in a dispute over $2.7 million the company and its lawyers were ordered to pay in a personal injury case.
The justices on Tuesday sent the case back to a lower court to decide whether an Arizona family injured in a 2003 motor home accident is entitled to the entire amount.
The family sued Goodyear after they were seriously injured when a tire failed on their motor home, causing it to flip off the road. After settling the case in 2010, the family discovered the company hadn't turned over key testing data.
A federal judge said nearly all of the family's attorney fees could be blamed on the misconduct. A federal appeals court agreed.
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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.