Md. Court of Appeals voids legislative fixes in 2 consumer cases

Assembly had reversed court rulings it didn't like on HMOs, late cable fees

`Thousands' may be due refunds

August 31, 2002|By M. William Salganik | M. William Salganik,SUN STAFF

The Maryland Court of Appeals has knocked down two efforts by lawmakers to apply retroactive fixes to court decisions they didn't like.

Both were consumer lawsuits - one over HMO payments and the other over cable television late fees. The ruling opens the way for class-action suits to recover money from HMOs and cable companies, Kieron Quinn, who won both cases, said yesterday.

"The Court of Appeals has established itself as the protector for the citizens of the state, which is a position the legislature has run away from," Quinn said.

Quinn said it would not be known until the cases develop further how many consumers were eligible for refunds, but he expected them to be in the "thousands."

The ruling is "very significant" apart from the amounts consumers collect, said F. Paul Bland, another lawyer who worked on one of the cases.

"There's a trend that, when a company loses a suit against a consumer, it makes a calculation of whether its cheaper to pay the consumers, or pay political contributions to get the law changed."

Bland, a staff attorney for the Trial Lawyers for Public Justice in Washington, said his organization would spread the word to consumer groups and attorneys in other states, many of which have constitutional provisions similar to Maryland's.

The court's unanimous decision, issued Thursday, said, "It has been firmly settled by this court's opinions that the Constitution of Maryland prohibits legislation which retroactively abrogates vested rights."

The ruling by the state's highest court was based on two separate cases in which legislators, unhappy with court decisions, tried to reach back in time to change the law.

In the HMO case, the court held that health maintenance organizations do not have a right to collect from a patient who has received payment from the person who injured him.

During the legislative debate, it was estimated that HMOs collected $15 million to $20 million annually from such patients in Maryland.

In the television case, the court decided that the cable companies couldn't charge a $5-a-month late fee and were limited to assessing 6 percent annual interest on unpaid bills.

In both cases, the General Assembly passed laws - going back five years for the cable bills and 25 years for the HMOs - to allow the practices. Industry lobbyists had argued that their clients might have to make refunds extending back years.

"This bill would codify what many of us thought was the law all along," House Speaker Casper R. Taylor Jr. said in arguing for the HMO bill in 2000.

The Court of Appeals, however, found that such retroactive laws violated the state Constitution's due process guarantee. Since the decision was based on the state Constitution, Bland said, it cannot be challenged in federal courts.

Susan Whyte Simon, a spokeswoman for the Kaiser Permanente HMO, the defendant in the HMO case, said the ruling "will not benefit consumers. Rather, it will end up increasing the cost of health care."

Kirstie Durr, a spokeswoman for Comcast Corp., the defendant in the cable-fee case, said its attorneys had yet to review the decision.

Bland said the decision does not affect the rights of HMOs and cable companies in the future but was concerned only with whether laws could change the rules to block claims from the past.

He said potential claims against the HMOs also could be restricted by a three-year statute of limitations.

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