The U.S. Court of Appeals for the Second Circuit rules that the six-year statute of limitations applicable to private rights of action under the Federal False Claims Act should be applied to private rights of action under the Medicare Secondary Payer Act. (Manning v. Utilities Mutual Insurance, U.S. Ct. App., 2nd Cir., Docket No. 00-9219, June 20, 2001).
On February 27, 1962, Robert Manning was rendered a quadriplegic when he fell from a utility pole while working for Niagara Mohawk Power Co. Mr. Manning received workers' compensation benefits from Niagara's insurer, Utilities Mutual Insurance Co. (UMI), until he obtained a judgment against New York Telephone Co., owner of the utility pole, in 1968. In 1973, having exhausted his recovery from New York Telephone, Mr. Manning requested that Niagara and UMI resume his workers' compensation benefits. They refused and a protracted legal battle ensued, with the parties not settling until 1997.
On July 7, 1998, Mr. Manning filed a complaint seeking damages of two times $876,321, the cost of his medical care since 1992. He alleged that these costs should have been paid by Niagara and UMI, but instead were paid by Medicare. Mr. Manning claimed entitlement to these damages pursuant to the Medicare Secondary Payer Act (MSP), 42 U.S.C. § 1395y(b) (2000). In their motions to dismiss, Niagara and UMI argued that the MSP claim was time-barred. Since Congress failed to specify which limitations period applies, federal courts must establish the appropriate statute of limitations for private actions brought under the MSP. The district court ruled that the proper limitations period for MSP actions is established by borrowing the respective state limitations period most closely analogous to the MSP statute, which in this case would time-bar Mr. Manning's claim. Mr. Manning appealed, arguing that the Federal False Claims Act is a more analogous federal statute and that its six-year limitations period should apply to private rights of action brought under the MSP.
Although conceding that "it is a close question," the U.S. Court of Appeals for the Second Circuit agrees with Mr. Manning. Focusing on two earlier rulings, Reed, 488 U.S. and Phelan v. Local 305, 973 F.2d 1050, 1058 (2d Cir. 1992), cert. denied, 507 U.S. 972 (1993), the court concludes that federal rather than state limitations periods should be borrowed when "(1) a federal rule of limitations clearly provides a closer analogy than state alternatives, and (2) the federal policies at stake and the practicalities of the litigation render the federal limitation a significantly more appropriate vehicle for interstitial lawmaking." Phelan, 973 F.2d at 1058. The court finds that these strict requirements are met in the case of private actions brought under the MSP.
For the full-text of this decision, go to https://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=2nd&navby=case&no=009219
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