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State v. Superior Court of Los Angeles County8/31/2000
As modified September 13, 2000. There is no change in the judgment.
STATE OF CALIFORNIA ET AL., PETITIONERS,
v.
THE SUPERIOR COURT OF LOS ANGELES COUNTY, RESPONDENT; LOUIS J. BOLDUC ET AL., REAL PARTIES IN INTEREST.
(Super. Ct. No. BC213416)
Bill Lockyer, Attorney General, Richard M. Frank, Chief Assistant Attorney General, Dennis Eckhart, Senior Assistant Attorney General, and William F. Soo Hoo, Deputy Attorney General, for Petitioners. Stephen H. Heller; Robert M. Tessier; Cheong, Denove, Rowell, Antablin & Bennett, and John D. Rowell for Real Parties in Interest. No appearance for Respondent.
CERTIFIED FOR PUBLICATION
ORIGINAL PROCEEDING, petition for a writ of mandate, Bruce E. Mitchell, Temporary Judge. (Pursuant to Cal. Const., art. VI, § 21.) Petition granted.
The State of California and others sued six tobacco companies and others to recover money paid by the State for the treatment of tobacco-related illnesses suffered by its Medi-Cal beneficiaries. In coordinated litigation involving most of the 50 states, the dispute was resolved by a $206 billion settlement, from which California will receive about $25 billion over the next 25 years. The ink on the settlement was barely dry when a group of Medi-Cal beneficiaries filed the lawsuit that is now before us to claim the "excess" money recovered by the State -- that is, everything over and above the amounts necessary to reimburse the state and federal governments for the money actually paid to the Medi-Cal beneficiaries' healthcare providers. We agree with the State that, as a matter of law, the beneficiaries are not entitled to the relief they seek.
BACKGROUND
The Tobacco Litigation
In 1997, the State of California sued several major tobacco companies and their organizations for injunctive relief and statutory civil penalties for alleged violations of the Cartwright Act (Bus. & Prof. Code, § 16720 et seq.), the False Claims Act (Gov. Code, § 12651, subd. (a)(7)), and the Unfair Competition Act (Bus. & Prof. Code, § 17200 et. seq.), and to recover the money spent by the State during the preceding three years to provide Medi-Cal benefits for smoking-related illnesses. (Welf. & Inst. Code, § 14124.71.) The State's action tracked similar suits brought by other states and territories (the Tobacco Litigation). In 1998, the Tobacco Litigation was settled for $206 billion, with 46 states (including California) and six territories signing a Master Settlement Agreement (MSA) that obligates the tobacco companies to pay about $25 billion to the State of California over a period of 25 years.
The Present Lawsuit
In 1999, Louis J. Bolduc (and others included in our references to Bolduc) sued the State of California (and others included in our references to the State) for declaratory and injunctive relief, an accounting, and imposition of a constructive trust. Bolduc alleges that he has received (and will in the future continue to receive) treatment for smoking-related illnesses and ailments, at least some of which has been and will be paid for in whole or in part by Medi-Cal.
Bolduc alleges, correctly, that the State is required to obtain from every Medi-Cal beneficiary an assignment of his right to recover past and future medical benefits from any potentially liable third party. In California, this assignment is automatic. (Welf. & Inst. Code, § 14008.6 [as a condition of eligibility for Medi-Cal services, a beneficiary must assign to the state any rights he may have to medical support and to
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