Martin Ex Rel. Hoff v. City of Rochester

615 N.W.2d 867, 2000 WL 1146813
CourtCourt of Appeals of Minnesota
DecidedOctober 17, 2000
DocketC3-00-398
StatusPublished
Cited by1 cases

This text of 615 N.W.2d 867 (Martin Ex Rel. Hoff v. City of Rochester) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Martin Ex Rel. Hoff v. City of Rochester, 615 N.W.2d 867, 2000 WL 1146813 (Mich. Ct. App. 2000).

Opinion

OPINION

DAVIES, Judge

The state claims that the district court erred in finding that Minnesota’s medical-assistance lien provision is in conflict with federal Medicaid law. Because we find that compliance with both state and federal law is possible, we reverse.

FACTS

Troy Hoff suffered brain damage in a motor-vehicle accident and was permanently disabled. Respondent Joan Martin, Hoffs mother, applied for and received medical assistance on Hoffs behalf and, under Minnesota statutes, assigned Hoffs rights to any insurance recovery to appellant State of Minnesota.

Respondent then brought a personal-injury action against the City of Rochester and others on behalf of her son. Under Minn.Stat. § 256.015, the state filed a lien against this action to secure reimbursement of medical expenses it had paid to treat his injuries. The district court held that Minn.Stat. § 256.015 was invalid because it conflicted with 42 U.S.C. §§ 1396k and 1396p, and, thus, the federal statute preempted the state statute. On appeal, the state contends there is no preemption and the federal statute does not bar the state from placing a hen on the tort recovery.

ISSUES

I. Does federal law allow the state to impose a lien on a third-party tort settlement to secure reimbursement of medical assistance paid?

II. Is this court required to strike appellant’s appendix as outside the record?

ANALYSIS

I.

The preemption doctrine stems from the Supremacy Clause of the United States Constitution, which provides that the laws of the United States “shall be the supreme Law of the Land * * * any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const, art. VI, cl. 2. According to the preemption doctrine, conflicts between federal and state law are to be resolved in favor of federal law. Fidelity Fed. Sav. and Loan Ass’n v. de la Cuesta, 458 U.S. 141, 152-53, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1982).

Minnesota’s three-part analysis to determine whether a federal statute preempts operation of a state statute looks at whether: (1) compliance with both the federal and state provisions is impossible; (2) preemption is express and unequivocal in the language of the federal statute; and (3) congressional preemptive intent is implicit in the overall scheme of federal and state regulation. Highland Chateau, Inc. v. Minnesota Dep’t of Pub. Welfare, 356 *869 N.W.2d 804, 809-10 (Minn.App.1984), review denied (Minn. Feb. 6, 1985). The question in this case is whether compliance with both federal and state law is possible.

The relevant federal statute provides:

No lien may be imposed against the property of any individual prior to his death on account of medical assistance paid or to be paid on his behalf under the State plan * * *.

42 U.S.C. § 1396p(a)(l) (1994). Another federal provision, however, directs the ' states to require that an individual receiving medical assistance must assign his rights to “payment for medical care from any third party.” 42 U.S.C. § 1396k(a)(l)(A) (1994).

The state lien statute provides that the state shall have a lien for the cost of medical care against “any and all causes of action.” Minn.Stat. § 256.015 (Supp.1999). Respondent asserts that this provision violates the foregoing federal statute because it provides for a lien against the property of Hoff before his death. 1 Respondent argues that, although the state may seek reimbursement directly from a third party who is legally hable for the injuries resulting in medical care, it may not proceed as it did in the instant case by asserting a lien against the recipient’s “property”, i.e., their cause of action.

The Utah Supreme Court recently addressed this issue in Wallace v. Estate of Jackson, 972 P.2d 446 (Utah 1998), cert. denied, - U.S. -, 120 S.Ct. 42, 145 L.Ed.2d 38 (1999), and a companion case, S.S. v. State, 972 P.2d 439 (Utah 1998). The Utah court was presented with a challenge to the state’s ability to assert liens against a Medicaid recipient’s third-party tort recovery. That court upheld the statute by finding that

payments made by a third party do not legally become the property of the recipient until after a valid settlement which must include reimbursement to the State for Medicaid benefits.

Wallace, 972 P.2d at 448.

In upholding the Utah lien statute, the Utah court relied in part on a decision by the New York Court of Appeals in Cricchio v. Pennisi, 90 N.Y.2d 296, 660 N.Y.S.2d 679, 683 N.E.2d 301 (1997), which stated that

settlement proceeds are resources of the third-party tortfeasor that are owed to [the state]. Accordingly, the lien on the settlement proceeds attaches to the property of the third party, and thus does not violate the statutory prohibition against imposing a lien against a beneficiary’s property until after his or her death. The flaw in plaintiffs’ theory that the lien cannot be satisfied until the recipient’s death is that it fails to appreciate this critical distinction between the assets of a responsible third party and assets belonging to the Medicaid recipient.

Id. at 305 (citations omitted).

The Second Circuit recently reached the same result, but on a rationale we find more persuasive. The Second Circuit stated:

Pursuant to federal law, Medicaid recipients must assign to the state their rights to seek and collect payment for medical care from a responsible third party. As part of its recoupment power, the [state agency] administering Medicaid may *870 place a lien on the Medicaid recipient’s personal injury claims against a tortfea-sor in order to recover the agency’s medical expenditures. [These] liens enjoy a specific exemption from the general rule that the state may not encumber a Medicaid recipient’s property prior to death.

Sullivan v. County of Suffolk, 174 F.3d 282, 285 (2d Cir.1999), cert. denied, — U.S. -, 120 S.Ct. 372, 145 L.Ed.2d 290 (1999) (citations omitted).

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Cite This Page — Counsel Stack

Bluebook (online)
615 N.W.2d 867, 2000 WL 1146813, Counsel Stack Legal Research, https://law.counselstack.com/opinion/martin-ex-rel-hoff-v-city-of-rochester-minnctapp-2000.