[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2245 Introduced in Senate (IS)]
103d CONGRESS
2d Session
S. 2245
To provide additional methods of recovering costs to the Federal
Government health care programs attributable to tobacco related
illnesses and diseases, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 28 (legislative day, June 7), 1994
Mr. Lautenberg (for himself and Mr. Harkin) introduced the following
bill; which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To provide additional methods of recovering costs to the Federal
Government health care programs attributable to tobacco related
illnesses and diseases, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Medicare and Medicaid Third Party
Liability Act''.
SEC. 2. FINDINGS AND PURPOSE.
(a) Findings.--The Congress finds that--
(1) illnesses and diseases that result from the use of
tobacco products cost Federal Government health care programs
billions of dollars, including at least $16,000,000,000 in the
medicare program and $3,000,000,000 in the medicaid program for
inpatient hospital services in fiscal year 1994;
(2) over the next 20 years, such illnesses and diseases
will cost the medicare trust funds at least $800,000,000,000;
(3) in April 1994, the trustees of the medicare trust funds
concluded that such funds may be insolvent in 7 years, with
$128,000,000,000 of expenditures due to such illnesses and
diseases;
(4) recent discoveries, including documents, patents and
patent applications, and testimony, have shown that--
(A) the tobacco industry has known for years that
the nicotine in cigarettes is addictive,
(B) the industry has attempted both to conceal this
information from the public and the Government and to
manipulate the amount of nicotine in cigarettes, and
(C) it is possible to manufacture cigarettes which
are far less dangerous to consumers;
(5) more than 36 percent of medicare recipients are former
smokers and 20 percent are current smokers;
(6) approximately 43 percent of medicaid recipients smoke,
compared to 26 percent of the general public;
(7) the medicare population is much more at risk of
contacting illnesses and diseases that result from the use of
tobacco products than younger smokers, because such population
has smoked longer;
(8) legal scholars and courts are increasingly agreeing
that it is appropriate to use statistical evidence to prove
causation; and
(9) in view of the large number of Americans killed,
disabled, or otherwise injured each year as a result of smoking
cigarettes, the addictiveness of the nicotine in cigarettes,
and the absence of any significant benefits to society from
smoking, cigarettes are an unreasonably dangerous product and
cigarette manufacturers are engaged in abnormally dangerous
activities.
(b) Purpose.--The purpose of this Act is to allow the American
taxpayers to recoup billions of dollars in Federal Government health
care funds spent on tobacco related illnesses and diseases.
SEC. 3. CLASS ACTION TO RECOVER COSTS TO FEDERAL GOVERNMENT HEALTH CARE
PROGRAMS OF TOBACCO RELATED ILLNESSES AND DISEASES.
(a) In General.--(1) With respect to payments made under any
applicable Federal Government health care program to or on behalf of
more than one recipient with a disease, illness, condition, or
complication caused, in whole or in part, by the use of tobacco
products, the Attorney General of the United States may seek recovery
for such payments from third parties (or any successors to such third
parties) that manufacture tobacco products. The Attorney General (after
consultation with the appropriate Secretaries who administer such
programs) may bring an action in the name of the United States in
United States district court to recover such payments made to or on
behalf of all such recipients in one proceeding.
(2) Any action to enforce the rights of the Attorney General under
this section with respect to any payment described in paragraph (1)
shall be commenced within 5 years of such payment.
(3) For purposes of paragraph (1), the term ``applicable Federal
Government health care program'' includes--
(A) the medicare program under title XVIII of the Social
Security Act;
(B) the medicaid program under title XIX of such Act;
(C) the veterans health care program under title 38, United
States Code; and
(D) any other similar Federal health care program.
(b) Notice Under the Class Action.--(1) In any action brought under
this section, no notice to recipients described in subsection (a)(1) is
required, and such recipients shall have no right to become a party to
such action. Such action is independent of any rights or causes of
action of such recipients.
(2) In any such action in which the number of recipients described
in subsection (a)(1) is so large as to cause it to be impracticable to
join or identify each claim, the Attorney General shall not be required
to so identify the individual recipients for which payment has been
made, but rather can proceed to seek recovery based upon payments made
to or on behalf of an entire class of recipients.
(c) Rules of Evidence.--In any action brought under this section,
the Federal Rules of Evidence shall be construed, regarding the
introduction and probative value of evidence on the issues of causation
and damages, in order to effectuate the purposes of this Act to the
greatest extent possible. The issues of causation and damages in any
such action may be proven by use of statistical analysis or
epidemiological evidence, or both.
(d) Share of Liability.--In any action brought under this section
in which a third party is liable due to its manufacture, sale, or
distribution of a tobacco product, the Attorney General shall be
allowed to proceed under a market share theory, if the products
involved are substantially interchangeable and substantially similar
factual or legal issues would be involved in seeking recovery against
each liable third party individually. In the alternative, the Attorney
General shall be allowed to proceed under a theory of concerted action
or enterprise liability, or both, if warranted by the facts presented
to the court.
(e) Distribution of Recovery.--Amounts recovered under any action
brought under this section shall be paid to the United States and
disposed of as follows:
(1) In the case of amounts recovered arising out of a claim
under title XIX of the Social Security Act, there shall be paid
to each State agency an amount bearing the same proportion to
the total amount recovered as the State's share of the amount
paid by the State agency for such claim bears to the total
amount paid for such claim.
(2) Such portion of the amounts recovered as is determined
to have been paid out of the trust funds under sections 1817
and 1841 of the Social Security Act shall be repaid to such
trust funds.
(3) The remainder of the amounts recovered shall be
deposited as miscellaneous receipts of the Treasury of the
United States.
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