Day on Torts
The United States Court of Appeals for the Ninth Circuit has ruled that an employer-based health insurance plan did not have a right to full reimbursement from a personal injury plaintiff who recovered only a fraction of her damages from the wrongdoer.
The case is CGI v. Rose, No. 11-35127 (9th Cir. June 20, 2012).
In denying the insurer’s claim against Rose, the Court held that “parties may not by contract deprive [a court] of its power to act as a court in equity.” In a concurring opinion, Circuit Judge Schroeder observed that it would be “manifestly unfair” to allow the plan to recoup 100% of its medical expenses. Such a result, Judge Shroeder observed, would “leav[e] the beneficiary vastly undercompensated for her actual damages” and “unjustly enrich” the ERISA plan, which had been paid premiums for the expenses it was now seeking to recoup.
The opinion is consistent with US Airways v. McCutchen, a case decided by before the Third Circuit.
Is the tide beginning to shift to fairness and common sense? It sure feels like it.
Thanks to Public Justice for its work on this case.