This article has been published in “The Advocate”, a monthly publication of the Arizona Association for Justice/Arizona Trial Lawyers Association, March – April 2014 issue, @2014 by Steven J. Bruzonsky, Esq.
Updates On Various Types of Lien Issues
FEHBA Liens: The U.S. Supreme Court, in Empire Healthchoice Assurance, Inc. v. McVeigh,547 U.S. 677 (2006), affirmed the Second Circuit and District Court dismissals for lack of federal subject matter jurisdiction of an FEHBA lien claim. The wording of the opinion certainly gives support to the proposition that in regard to FEHBA lien claims, there is no federal court jurisdiction, no federal question presented, and no federal preemption of state anti-subrogation law.
In Kobold v. Aetna Life Ins. Co., 309 P.3d 924, 233 Ariz. 190 (Sept. 5, 2013), Division One, Arizona Court of appeals, held that (1) McVeigh did not decide whether contract-based reimbursement rights fall within the FEHBA preemption clause, and that (2) the FEHBA and its Section 902’s preemption clause does not preempt Arizona law governing contract-based subrogation rights. (In the underlying Maricopa County Superior Court case, the court granted summary judgment that a FEHBA healthplan subrogation and reimbursement provision is unenforceable based upon the U. S. Supreme Court’s decision in McVeigh and Arizona anti-subrogation case law, also awarding attorney’s fees against the health plan.)