§ 1911. Tobacco manufacturers; liability for Medicaid expenditures

(a) After the State has paid medical assistance benefits to eligible persons for tobacco-related health conditions under this chapter, the State may recover from tobacco manufacturers the amount paid or likely to be paid for medical assistance to such persons, plus punitive damages, costs, reasonable attorney’s fees, and other appropriate relief.

(b) The cause of action created in this section shall be a direct cause of action and not a subrogated cause of action. Affirmative defenses relating to subrogated causes of action shall not apply to this direct cause of action.

(c) In order to recover under subsection (a) of this section, the State shall prove:

(1) that the tobacco manufacturers were either negligent or produced a defective product unreasonably dangerous to the user or consumer who received or will receive medical assistance;

(2) that the tobacco product caused the health conditions for which the State seeks reimbursement; and

(3) the amount of compensatory damages and the appropriateness of any other relief sought.

(d) The right of the State to bring a cause of action against a tobacco manufacturer under this section shall be independent of and not construed to affect any rights or causes of action by an individual Medicaid benefits recipient to recover damages or other relief as a result of a tobacco-related health condition. In the event that recovery of Medicaid expenditures has been achieved and the individual recipient thereafter recovers damages from a tobacco manufacturer, then the tobacco manufacturer shall be entitled to a setoff for the amount of any such Medicaid recovery which represents the expenditure on behalf of the individual recipient.

(e) Existing common law and statutory actions available to recover Medicaid expenditures from a tobacco manufacturer, including direct action, are expressly preserved. An action brought pursuant to this section may be brought in addition to any existing common law or statutory action, or both, and shall not preempt, limit, or extinguish those actions.

(f) In any action brought pursuant to this section:

(1) Joint and several liability applies to any judgment in favor of the State, except as provided in subdivision (2) of this subsection.

(2) The State may proceed under the market share theory for allocation of damages between or among tobacco manufacturers, provided that the tobacco products involved are substantially interchangeable among brands, and substantially similar factual and legal issues are involved in seeking recovery against each individual tobacco manufacturer. In the event the State elects to proceed under the market share theory, joint and several liability shall not apply.

(3) Sums paid to all recipients may be recovered in a single action.

(4) If the number of recipients is sufficiently large so that it is impracticable to identify the recipients, the court may require the State to release information on individual recipients including individual Medicaid and medical records that are in the possession, custody, or control of the State, to the extent necessary for the defendant to establish its defenses, subject to such orders as are necessary to maintain the privacy of the recipients and to prevent Medicaid fraud.

(5) Evidence of statistical analysis may be admissible to prove or rebut the elements of subdivisions (c)(2) and (3) of this section.

(g) Before the State enters into a contract with an attorney to represent the State in an action brought pursuant to this section, the contract shall be reviewed and approved by the Joint Fiscal Committee. The Joint Fiscal Committee shall approve the contract if it determines that the contract is reasonable under the circumstances. (Added 1997, No. 142 (Adj. Sess.), § 3, eff. April 23, 1998.)