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No. 06-35672 (9th Cir.), case in progress for several years

Updated: October 22, 2009


Issue: Whether the actions and inactions of a Medicare Part D plan, defendant Humana, in failing to enroll, and otherwise provide prescription drug coverage to, the plaintiff beneficiaries cannot be challenged under state law fraud and breach of contract causes of actions because the grievance procedures established in the Medicare Prescription Drug Improvement and Modernization Act of 2003 ("MMA") preempt those claims.


Relief sought: Damages on behalf of a putative nationwide class of Part D beneficiaries who did not receive the proper prescription drug benefits from Humana.


Status: The district court dismissed the complaint for failure to state a claim on the ground that the MMA preempted the state law claims raised by the plaintiffs.  2006 WL 1587443 (W.D.Wash., June 2, 2006).  On appeal, the Court of Appeals initially affirmed that decision, holding that the claims were preempted.  540 F.3d 980 (9th Cir. 2008).  On the plaintiffs-appellants' request for rehearing, however, the panel withdrew that decision.  573 F.3d 865 (2009).  The panel then issued an order asking the federal government to submit an amicus brief.  Before that brief was filed, the National Senior Citizens Law, California Health Advocates, the Center for Medicare Advocacy, and the Medicare Rights Center requested and were granted the right to submit an amicus brief supporting the plaintiffs-appellants' position that their state law claims should not be preempted.  The federal government submitted an amicus brief supporting Humana.  The parties then responded to the amicus briefs


In a decision issued on August 31, 2010, the Court of Appeals again affirmed the district court. 2010 WL 3385546. First, it determined that plaintiffs' breach of contract and unjust enrichment claims were "at bottom" claims for benefits, which therefore required exhaustion of administration remedies before they could be brought to court. Since plaintiffs had not exhausted, the district court had lacked jurisdiction over those claims. Second, the court concluded that the consumer protection and fraud claims were collateral to claims for benefits and therefore did not arise under the Medicare Act and were not subject to the exhaustion requirements. But the court held that these claims were preempted by the language of Part D and therefore the district court could not consider them. (For a more detailed description of the decision in Uhm, see the Center's Alert of Sept. 30, 2010.) 



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