SCt HMO decision: know why HMOs want Fed not State Ct jurisdiction?

[AP]

It's because the Fed Cts are more expensive to litigate in, and because judges are more loyal to the federal government than to the states.

In the state courts, the rules and the intangibles would normally benefit a state citizen plaintiff over a national corporation. That's why the HMOs were so eager to keep suits against them out of the state courts. The expense alone will discourage many plaintiffs at the margins.

Nice Democracy we have, eh?

Consumer vs Corporation, the government will always do what it can to give the corporations a leg up.

(Incidentally, it looks like the SCt's hands were tied with this case. The statute was probably clear. If you don't like this rule, bitch out your congressperson for passing a law stacked in the favor of HMOs.)

[sandnsea]

1. Limited liability

I read that ERISA limits liability to the actual cost of services in federal court, you can't get damages. So if you die because they denied you a $25,000 surgery, your family only gets $25,000. Champagne corks are popping in every CEO office and board room of every insurance company across the country.

[AP]

3. From top to bottom, the Fed rules tend to benefit corps.

State constitutions have to provide a floor of rights that are no lower than federal rights. They can give you more rights, but not less.

And the federal gov't may have sold out to corps, but you might be lucky enough to live in a state that hasn't sold out as badly.

Corps know they have the federal gov't in their pockets. Can't count on each state.

[dr.strangelove]

2. First Reply - Why Fed Jurisdiction

While Federal Court may have slightly higher filing fees than most state courts, you are talking about less than $100 per motion. So thats not it. The litigations costs between state and federal courts are virtually the same. I do a significant amount of state and federal litigation, and I don't think there is any major difference in cost.

However, you are right on the money with regard to judges more traditionally friendly to defendants. Most surveys of dismissals and summary judgments indicate federal court is much more favorable for defendants. (Don't have a link, but I'm sure someone can find one).

I think the real reason is the jury pool. With the exception of some Florida federal courts, Philidelphia and chicago, the local state courts traditionally award much higher verdicts than the federal counterparts. There are lots of theories about why, however I don;t think anyone has ever figured this out. Federal juries give much cheaper awards.

[AP]

5. Federal litigation is more complicated and it's harder, and you tend to...

...need a more experienced lawyer who charges more. It's not absolutely required, but my experience is that if a plaintiff goes through federal court it's going to mean a higher bill. It's not just filing costs.

Even within a firm, someone who bills at a higher rate will do more fed ct work, whill the younger associates learn the ropes in state court first.

You don't agree?

[dr.strangelove]

6. I don't agree

Not really. If a case moves to federal court, we don;t change the attorney on the file. We have the same lawyers working on federal and state cases. Federal law isn't more complicated. I have a first year associate working close to me on a federal trial now. He never "cut his teeth" in state court. Come to think of it, my first trial work was also in federal court.

To be honest, lawyer assignment is primarily based upon client preference, availability and experience. I work with ERISA quite a bit, and I therefor do more federal law. My boss is a med mal guy. He has 20 years more experience than I, but I would go to federal court before him, even though he bills at double my rate.

I don't think federal court is any more difficult. At the onset, federal notice pleading is very easy, therefore less complicated motions get filed early. Discovery tends to take lots of time, but depositions and such are usually done by cheaper younger lawyers. Actual trial work gets done by the same litigators, whether it be federal or state.

I really don't think federal litigation would cost someone more than state. this is especially true in medical malpractice claims. State med mal claims are VERY expensive. Expert witness fees alone are sometimes $10,000 - $20,000 per expert.

[AP]

7. Most med mal is in state courts. But I do think for a plaintiff to get

a med mal claim removed to Fed Ct is good for the D bad for the P, and means things are more expensive. Just my observation. I only know people who do it. No first hand experience.

[dr.strangelove]

8. You are right that its bad for the plaintiff

I think the reason is the jury verdict potential rather than costs. Also, to get a med mal case under Federal jurisdiction is nearly impossible since tort law is state. There are very little fedral torts, and med mal is not one of them. The HMO ERISA connection is VERY RARE. For the feds to get jurisdiction they have to preempt the states.

[AP]

9. Another reason it's bad is appeals -- state court, you appeal to a court

that's within driving distance and then to your state capitol.

Fed court, your first appeal might be to a court in a different state, and then to DC.

That's going to add to lawyers fees, and if you want to increase your chances of winning, you might have to hire a lawyer to draft and argue the appeal who has a lot of familiarty with the appeals court. That won't come cheap.

[dr.strangelove]

4. ERISA

ERISA has very limited recoveries for an MCO plaintiff. Probably because Senator Javits never intended his law to apply to HMOs. It was designed to prevent abuse of benefits, pension and retirement funds managed by Third Parties. However, since HMOs are often an employment benefit, they often get ERISA protection.

HMOs want ERISA protection because monetary awards for the victorious plaintiff are nominal, just fees in excess of teh cost of service denied.

However, even if the case goes to state court, the state court still must apply the federal law. The question of jurisdiction does not alter the federal preemption of ERISA.

This is why we must support Sen. Kennedy and his patient bill of rights.