U.S. Supreme Court

SCOTUS rebuffs North Carolina 'semantics' in its quest for one-third of girl's med-mal settlement


North Carolina can’t obtain one-third of a girl’s medical malpractice settlement under a law that doesn’t take into account whether the money is attributable to medical care, the U.S. Supreme Court has ruled.

The North Carolina statute is pre-empted by federal Medicaid law that bars liens on portions of a settlement that don’t cover medical costs, the court ruled in a 6-3 decision. Justice Anthony M. Kennedy wrote the majority opinion (PDF).

The North Carolina law was intended to allow the state to recover from tortfeasors money spent from Medicaid funds to care for state residents. The state law permits North Carolina to recover one-third of a tort recovery under a rebuttable presumption that kicks in when state Medicaid expenses exceed one-third of the award.

“North Carolina has picked an arbitrary number—one-third—and by statutory command labeled that portion of a beneficiary’s tort recovery as representing payment for medical care,” Kennedy wrote. “Pre-emption is not a matter of semantics. A state may not evade the pre-emptive force of federal law by resorting to creative statutory interpretation or description at odds with the statute’s intended operation and effect.”

The court ruled in the case of Emily Armstrong of Taylorsville, N.C., who was injured when she was born in 2000, allegedly as a result of medical malpractice. She is deaf and blind, unable to sit or walk, and suffers from a seizure disorder. Her parents sued and obtained $2.8 million in a 2006 settlement that didn’t include a breakdown of how much was attributable to medical costs.

Chief Justice John G. Roberts Jr. dissented in an opinion joined by Justices Antonin Scalia and Clarence Thomas. The court’s reading of the federal Medicaid law, “while plausible, is not compelled by the statutory text or our precedent,” Roberts wrote.

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