Key Consumer Issues - Important Court Decisions


I. Auto Accidents
II. Employment
III. Class Action Lawsuits

Auto Accidents

ARKANSAS DEPARTMENT OF HEALTH AND HUMAN SERVICES ET AL. v. AHLBORN


Question Addressed: To what extent are states entitled to reimbursement for Medicaid payments made on behalf of an individual injured by a liable third party when the injured person recovers damages from the liable party?

Court Findings: Federal law requires states to seek reimbursement from liable third parties for the costs of medical care an injured individual receives through Medicaid. It also gives states the right to impose a lien on any tort settlement or award the injured individual may receive. However, the state is only entitled to reimbursement from the amount of the settlement or award designated for medical costs. If Medicaid payments made by the state exceed the amount of the settlement designated for medical costs, the state may not attempt to recover the remaining Medicaid expenditures from other portions of the settlement or award (for example, portions designated for lost wages or pain and suffering).

THURMAN ET AL. v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY ET AL.


Question Addressed: Whether auto liability insurance payments used to reimburse the federal government for the workers’ compensation and medical claims of an employee injured by a third party should be considered in determining whether or not the liable third party was uninsured/underinsured.

Court Findings: Georgia law defines an uninsured vehicle as one where the coverage available under the at-fault party’s liability insurance is less than the amount of the injured party’s own uninsured/underinsured motorist coverage (UM/UIM). Payments made to the federal government to reimburse it for workers compensation and medical claims paid on behalf the injured employee should be subtracted from the total amount of liability coverage carried by the at-fault party to determine the amount of liability coverage available to pay any other claims of the injured party. The amount of liability coverage actually available to pay the injured party’s claims should then be compared to the UM/UIM limits carried by the injured party; if the available liability coverage is less than the UM/UIM and less than the injured party’s damages, the UM/UIM coverage should pay the difference up to its policy limits.

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Employment


ALVAREZ ET AL. AND TURN ET AL. v. BARBER FOODS, INC.


Questions Addressed: (1) Whether employees must be paid for the time it takes to walk between the area where they change into and out of required clothing and gear to the area where they perform their work. (2) Whether employees must be paid for time they spend waiting to put on protective gear at the beginning of their workday/shift.

Court Findings: Employees must be paid for any walking time that occurs between the beginning of the first principal activity of their workday and the end of the last principal activity. Employers do not have to pay employees for time spent waiting to put on protective gear before the start of their workday when employees are not required to arrive at work at a particular time and then wait to put on the gear.

Class Action Lawsuits


WARREN ET AL. v. ROLLINS, INC. AND ORKIN EXTERMINATING COMPANY, INC.

Question Addressed: Whether a complaint against Rollins/Orkin Exterminating Company alleging fraud, breach of contract, negligence, and other wrongdoing, including the failure to complete guaranteed annual inspections and treatment for termites, should receive class certification to allow two plaintiffs to bring suit on behalf of a large number of consumers who were similarly wronged.

Court Findings: The class proposed by the plaintiffs meets the legal requirements necessary for class certification. Potential plaintiffs include individuals or entities in Georgia who signed or renewed a Standard Termite Contract between October 16, 1995 and August 18, 2006 and who were charged for services not rendered.