Justices Reject Smokers’ Appeal

The U.S. Supreme Court on Monday spared cigarette makers from facing a lawsuit seeking recovery of smokers’ Medicare costs.

The court rejected an appeal on behalf of three smokers that invoked a federal law to sue for double damages that would be split with the federal government. Their lawyer, Robert J. Cynkar, said the suit sought to recover an estimated $100 billion in Medicare costs spent on smokers in the U.S. since 1992.

A lower-court decision dismissing the suit “will cost Medicare not only the opportunity to recover the billions at stake in this case but will create a huge loophole that can be exploited” by companies that are self-insured for liability claims, the smokers’ lawyers said in court papers filed in Washington.

A similar claim by the federal government for Medicare reimbursement was thrown out by a federal judge in 2000.

The tobacco companies still face a trial in September in the Justice Department’s $280-billion lawsuit accusing them of engaging in a 30-year pattern of racketeering to mislead the public and Congress about the risks of smoking.

The suit names New York-based Altria Group Inc., parent of Philip Morris USA; R.J. Reynolds Tobacco Holdings Inc.; Loews Corp.’s Lorillard Tobacco Co.; Brown & Williamson Tobacco Corp.; and Vector Group Ltd.’s Liggett Group Inc.

Altria spokesman John Sorrells said courts had dismissed 143 lawsuits by groups such as unions and public hospitals seeking recovery of health insurance costs from the tobacco companies. In two other cases, the companies are appealing a $17.8-million verdict in New York in favor of Empire Blue Cross & Blue Shield, and a jury in Akron, Ohio, decided in the companies’ favor in 1999.

In Monday’s case, two of the three people who sued in 1997 have since died. The suit was filed in Texas and transferred to a federal court in New York.

Under the federal Medicare as Secondary Payer law, when a Medicare patient’s treatment is also covered by other insurance, the other insurance must provide the primary coverage. The government or private individuals can sue to recover double any Medicare costs already paid.

A federal judge in New York threw out the three smokers’ suit in 2002. The U.S. 2nd Circuit Court of Appeals agreed last October, saying companies that hadn’t purchased liability insurance weren’t necessarily considered self-insurers that can be forced to pay under the Medicare as Secondary Payer law.