The Federal Government Revives Stricker – Again

Medicare Set-Aside Blog on November 14, 2011
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As you will recall, US v. Stricker was dismissed in September 2011 on the basis that the federal government failed to bring the suit in a timely manner. Regardless of what recovery law was applied, none would have salvaged the government’s claim. Then last winter they took another shot at resetting statute of limitations by arguing a theory of continuing liability. With ten annual periodic payment obligations, the government though SOL would start upon receipt of each payment and therefore it could still try to collect from those funds. That too was denied, much to the relief of the structured settlement industry. 

On 10/13/2011, Notice of Appeal was filed by our government friends. Mr. Stricker has filed a cross-appeal in which he seeks clarification as to whether the 3 or 6 year statute of limitations from the Federal Claims Collection Act applies to the attorneys representing the plaintiffs. Docket says Appellate Brief is due in 40 days so given that that would be next Tuesday, we may have some interesting reading to enjoy over our turkey.  Why interesting you ask?  Because I just don’t see what the government hopes to accomplish.

The court applied the FCCA, as pled by both sides, as well as could be expected. 3 years, 6 years – it really didn’t make a difference. The agreement was made months prior to the December date the government is relying upon.  Had the government stuck with the Federal False Claims Act it has been relying upon since Manning in 2001 for MSP claims, then at least it could be arguing over the date of notice as opposed to the dates of the making and receiving of the insurance payment – neither of which helps its cause. The government is clearly trying to use the last possible date for triggering SOL and that was the date of the final approval by the court, particularly as applied to the minors involved. Unfortunately this was a highly publicized $300 million dollar settlement involving an entire town in Alabama – kind of hard to imagine it knew nothing until that last possible moment. 

The only possible argument I can think of is that because the plaintiffs had to prove to the court that it obtained all of its signatures for the settlement to be finalized and that is what took place in December 2003, if the government can demonstrate that prior to that occurrence there was no settlement despite all the money having already been distributed, then the MSP would not have been triggered until that fateful December day, and as we all know, the MSP obligation in liability claims arises only by operation of law upon the settlement, judgment or award. 

Never a dull moment in the MSP world these days. Will keep you posted as things develop.