Maryland Court of Appeals Says Legislature Cannot Retroactively Strip Consumers’ Rights in HMO Double-Billing Case

TLPJ Successfully Challenges Constitutionality of Retroactive Law Allowing Double Billing

TLPJ Staff Attorney F. Paul Bland, Jr., arguing before Maryland's highest court in Annapolis on May 4, 2001. Video still by CTL Video.

In a landmark victory for consumers’ rights, the highest court in the State of Maryland ruled on August 29, 2002, that the State Legislature cannot retroactively strip consumers’ rights in Harvey v. Kaiser Foundation Health Plan of the Mid-Atlantic States, Trial Lawyers for Public Justice’s constitutional challenge to a law that would have retroactively validated an HMO’s unlawful double-billing of its members.

"For 25 years, the law of Maryland was clear that injured people had a right not to be charged twice by their HMOs for the same medical care. This decision establishes that the state legislature cannot retroactively take that right away from our clients," said TLPJ Staff Attorney F. Paul Bland, Jr., who argued the case on May 4, 2001 on behalf of plaintiff Douglas J. Harvey, a Kaiser member. "This is a final and complete victory for consumers; the HMOs have no further appeals."

TLPJ and a team of consumer rights lawyers first filed suit in 1996 on behalf of consumers challenging several HMOs’ double-billing practices, also know as "subrogation." On March 10, 2000, the Maryland Court of Appeals unanimously ruled in Riemer v. Columbia Medical Plan that HMOs throughout Maryland had been illegally billing their members – in direct violation of the Maryland HMO Act – by charging them a second time for medical care whenever the members recovered damage awards from third parties. In response to TLPJ’s pro-consumer victory in Riemer, HMO lobbyists convinced the Maryland legislature to pass legislation that allowed HMOs to pursue subrogation claims against their members and that applied retroactively to the previous 24 years. Governor Parris N. Glendening signed the bill into law on May 18, 2000. TLPJ and its legal team then filed their suit in Harvey on May 31, 2000, seeking a declaration that the new law’s retroactive application was unconstitutional.

"Maryland’s high court re-affirmed that the legislature may not go back in time to strip consumers of their legal rights," said co-counsel Kieron F. Quinn of Baltimore’s Quinn, Gordon & Wolf. "It also confirmed that an impartial judiciary is the principal protector of citizens’ rights. The action of the HMOs and their lobbyists in securing the midnight legislation that tried to give away 24 years of property rights of Maryland citizens to a handful of powerful insurers was shameful. It is time for the legislature to wake up and smell the roses."

"The Court upheld our clients’ right to a refund of the money that Kaiser unlawfully grabbed, since the Maryland HMO Act barred HMOs from pursuing subrogation against their members," said co-counsel Bruce Plaxen of Plaxen and Adler in Columbia, Maryland.

"The HMO lobbyists tried to rewrite an entire statute to get forgiveness for a quarter-century of pilfering," said co-counsel Robert K. Jenner of Janet, Willoughby, Gershon, Getz & Jenner in Baltimore. "The Court found that this outrageous conduct violated the Due Process and the Separation of Powers Clauses of the Maryland Constitution, among other provisions."

TLPJ’s Michael J. Quirk contributed a significant portion of the research and writing of the briefs filed with the Court of Appeals. In addition to Bland, Quinn, Plaxen, Jenner, and Quirk, TLPJ’s legal team on Harvey and Riemer, includes Marty Wolf of Quinn, Gordon & Wolf and TLPJ’s Kate Gordon. The decision in Harvey v. Kaiser Foundation Health Plan is posted on TLPJ’s web site, www.tlpj.org.

Trial Lawyers for Public Justice is the only public interest law firm dedicated to using trial lawyers’ skills and resources to advance the public good. Founded in 1982, TLPJ utilizes a network of more than 2,700 of the nation’s outstanding trial lawyers to pursue precedent-setting and socially significant litigation. TLPJ has a wide-ranging litigation docket in the areas of consumer rights, worker safety, civil rights and liberties, toxic torts, environmental protection, and access to the courts. TLPJ is the principal project of The TLPJ Foundation, a not-for-profit membership organization headquartered in Washington, DC, with a West Coast office in Oakland, California. TLPJ’s Maryland State Coordinator is Simon Walton, tel. 410-235-6425.

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