Legal News - Big Tobacco Owes Billions To Medicare
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Big Tobacco Owes Billions To Medicare

•  Legal Spotlight     updated  2008/05/21 09:57

Big Tobacco settled its obligations to reimburse states' Medicaid programs, but refuses to settle its multi-billion-dollar bill with the federal Medicare program, advocates for Medicare claim in Federal Court. "The district court in Philip Morris has already made all of the factual findings necessary to establish the Defendants' liability," the plaintiffs say. "The issue remaining for this Court to resolve is the amount due."

On behalf of Medicare, two groups and an individual sued Philip Morris and four other tobacco companies for billions of dollars. Plaintiffs claim that In United States v. Philip Morris USA, et al., 449 F. Supp. 2d 1, 28 (DDC 2006), "the federal government proceeded solely on civil RICO grounds," this complaint states, so "the court in Philip Morris granted only injunctive relief against the Defendants."

The complaint continues: "In 1997 and 1998, the Defendants settled their liability to Medicaid, but have resisted similarly settling their liability to Medicare. Yet the cost to Medicare has been massive - estimated at more than $10 billion per year. ...

"Despite the scope and depth of the Defendants' wrongdoing, this case is straightforward. The district court in Philip Morris has already made all of the factual findings necessary to establish the Defendants' liability, and to demonstrate their obligation to reimburse Medicare under the MSP statute [Medicare as Secondary Payer, 42 U.S.C. § 1395y(b)]. The issue remaining for this Court to resolve is the amount due."

Plaintiffs, The National Committee to Preserve Social Security and Medicare, the Medicare Rights Center, and James Mokeler, sue on behalf of Medicare.

Defendants in U.S. District Judge Jack Weinstein's court are Philip Morris USA, R.J. Reynolds Tobacco Co., individually and as successor by merger to Brown & Williamson USA, The American Tobacco Co., Lorillard Tobacco Co., and Liggett Group.

Plaintiffs' lead counsel is Jonathan Cuneo with Cuneo, Gilbert & Laduca of Washington, D.C.

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