DOJ Asks Permission to Pursue Tobacco Lawsuit
The Justice Department yesterday asked U.S. District Court Judge Gladys Kessler to reconsider an earlier decision that barred the government from seeking reimbursement from tobacco companies for smoking-related Medicare costs, the AP/Owensboro Messenger-Inquirer reports (Zuckerbrod, AP/Owensboro Messenger-Inquirer, 6/12). Last September, Kessler threw out a large part of the Justice Department's civil lawsuit against the tobacco industry by rejecting the department's claim that it could recover billions of dollars in smoking-related health care costs under the Medical Care Recovery Act and the Medicare provision of the Social Security Act. Kessler ruled that the Justice Department could not use the two laws to recover damages in the case because Congress had not written the laws for those purposes. Kessler also said that the government had "waited too long" to recover expenses that dated back to the 1950s. The government altered its claim and is now seeking reimbursement for costs dating back to the early 1990s.
Justice Department attorney James Ellison said Monday that the government should be able to sue the tobacco firms under a law that allows the government to "recoup Medicare expenditures from insurers." Ellison said the companies qualify as insurers because they "developed self-insurance plans against liability from the manufacture, sale and promotion of cigarettes." Tobacco industry lawyer Herbert Wachtell called that strategy a "stretch," saying that the tobacco companies bought "product liability insurance," not self-insurance. Kessler said that she will rule on the motion by the end of the summer, and that her decision will be final. In her earlier decision, Kessler allowed the government to pursue charges of racketeering against the industry, and a July 2003 trial is planned for that suit (AP/Owensboro Messenger-Inquirer, 6/12).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.