Sixth U.S. Circuit Court of Appeals Dismisses Third Party Payer Suit

In an opinion issued Tuesday, the 6th U.S. Circuit Court of Appeals agreed with eight other federal circuit courts of appeals holding that “third party payer” claims against the tobacco industry are too remote and should be dismissed.

The Perry case was brought by individual subscribers of Blue Cross and Blue Shield (BCBS) health insurance representing a proposed class of BCBS subscribers in Tennessee. These nonsmoking subscribers alleged that they paid higher insurance premiums because subscribers who were smokers with tobacco-related diseases drove up the costs that BCBS had to pay.

In dismissing the suit, 6th Circuit Judge R. Guy Cole Jr. agreed with the lower court that “these injuries are clearly indirect.”

Daniel Donahue, senior vice president and deputy general counsel for R.J. Reynolds Tobacco Company, noted that every federal appellate court that has addressed this issue (the 2nd, 3rd, 5th, 7th, 8th, 9th, 11th, D.C. circuits, and now the 6th) has confirmed that these types of cases are not legally appropriate.

In rejecting third-party-payer suits, courts have stated that if a claim for medical expenses exists, it must be brought, if at all, by the person who has the disease, not the hospital or insurance company that may pay a portion of the costs.