WASHINGTON, DC — On Monday, October 30, 2000, McDermott Will & Emery won an important victory for its client, Kaiser Foundation Health Plan of the Mid-Atlantic States. In the case of Harvey v. Kaiser Foundation Health Plan of the Mid-Atlantic States, Inc., Maryland Circuit Court Judge James C. Chapin granted Kaiser’s motion for summary judgement, effectively dismissing the suit against the company.
Monday’s decision was the latest development in a legal controversy that began with the Maryland Court of Appeals’ decision in Riemer v. Columbia Health Plan. In Riemer, the Court of Appeals declared that a long-standing practice of HMOs—seeking to recover the cost of providing medical expenses to a member when that member recovers money from the third party that caused the injury—was not permitted under Maryland’s HMO enabling statute. The legislature, concerned that the Court of Appeals’ decision would contribute to rising health care costs, moved quickly to overturn the decision by enacting Senate Bill 903. The Bill rendered this practice legal both retrospectively and prospectively.
Trial lawyers have challenged Senate Bill 903 on constitutional grounds in several different lawsuits. One such lawsuit was filed against Kaiser in the Montgomery County Circuit Court. Kaiser’s case was argued Monday by McDermott Will & Emery partner M. Miller Baker, who was assisted by partner Joel L. Michaels and associate Michael S. Nadel. Judge Chapin concluded that the legislation did not violate the federal or state "takings" clauses, the federal or state "due process" clauses or Maryland’s prohibitions on "special legislation." Judge Chapin further rejected the argument that by overturning the Court of Appeals’ decision, the legislature somehow violated the separation of powers doctrine.
Monday’s victory is significant because, if affirmed on appeal, it will preclude all related suits trial lawyers have brought against Kaiser and other Maryland health care providers.