October 8, 2010
With the reporting deadline rapidly approaching, Judge Kahn, presiding in the San Francisco asbestos litigation pretrial case management department, in early September, 2010 ordered the asbestos plaintiff and defense bar to submit briefs on their positions and proposals for a San Francisco General Order dealing with the looming Medicare Secondary Payer Act (MSPA) requirements.
Of overriding concern to San Francisco defendants, both self-insured and to their insurance carriers is the legal mandate that all parties to a qualifying settlement, judgment or payment of any kind to a Medicare-eligible asbestos claimant remain responsible for full payment or satisfaction of any lien Medicare might have for past or future benefits paid to the claimant.
The basic response by San Francisco plaintiff counsel is that enacting a general order of the type proposed by defendants (similar to a Wayne County, Michigan case management order*) at this time would be premature and unfairly delay payment of settlement funds to injured parties.
The court set the hearings on these issues for late September and most recently, on October 5th. These hearings were the culmination of a process begun in May 2010 when Judge Kahn appointed asbestos defense counsel representatives and representative plaintiff attorneys to an ad hoc committee (committee) to begin court-sanctioned discussions on compliance with the MPSA in that jurisdiction.
Judge Kahn emphasized during the hearings that the court believes the language in settling parties' release agreements is a matter of individual contract negotiation; and not an area, absent a general consensus of the parties involved in the San Francisco asbestos litigation, that should be subject to a General Order by the court.
Judge Kahn expressed opinions (not those of or endorsed by this author) that defense concerns about the MSPA reimbursement duties are excessive and unrealistic; that the proposed defense General Order schemes would unnecessarily delay injured plaintiffs receiving the proceeds of their settlements; that creating a General Order now would be premature in that the reporting provisions of the law has not gone into effect, and there may be radical changes implemented once Medicare has to deal with the practical effects of the law on its bureaucracy.
What this means for the management of the San Francisco asbestos trial docket is ominous in terms of resolving cases short of verdict after October 1, 2010. The asbestos defense bar consensus is that very few cases will settle if the Brayton office, which has the bulk of pending asbestos trial cases in San Francisco, continues its current position of refusing to accept Medicare-related release language as proposed by the defense bar in their cases.
During the hearings, the parties involved in the stalemate revealed that approximately 880 Brayton cases that had been considered settled and removed from the trial docket prior to the October 1, 2010 deadline remain unresolved as to some defendants. Judge Kahn was well aware of the probable adverse effect that the lack of a new General Order would have on the future settlement of asbestos cases. What the court did not disclose was what plan, if any, it has formulated to deal with the prospect that very few asbestos cases would resolve in the near future as a result of the impasse over MSPA requirements.
The hearings concluded with the Brayton office agreeing to review language proposed by the committee. Judge Kahn indicated that he would meet with the committee and Brayton office next week to review their progress, if any.
Based on the foregoing, and unless Brayton shows some flexibility with its release language, the current San Francisco asbestos case settlement management process for controlling the asbestos trial docket faces an uncertain and difficult 60 to 90 days.
*In the addendum to this Alert are copies of release language and general orders considered by the committee as exemplars from the Madison County, Illinois Order re Medicare Reporting and the Wayne County, Michigan Case Management Order.
Dean Pollack is a trial lawyer whose practice focuses on product liability and asbestos litigation. He can be reached at 510.835.6705 or firstname.lastname@example.org. Walt Rundin specializes in environmental and personal injury litigation. He can be reached at 510.835.6726 or email@example.com.