Scalia’s Absence Felt in Federalist High Court Battle

WASHINGTON (CN) – Justice Antonin Scalia’s seat on the U.S. Supreme Court remains empty over a year after his death, but former colleagues of the conservative stalwart noted Wednesday that he would have relished the federalism battle underway this morning.

The case stems from efforts by Missouri postal worker Jodie Nevils to keep the proceeds of his car-crash settlement out of the hands of the insurance company that already paid him $6,000.

“You know, our colleague Justice Scalia is not here any longer, but he would be having a fit at this point,” Justice Samuel Alito remarked at oral argument Wednesday.

Under the Federal Employees Health Benefits Act, which governs the insurance policies of federal employees like Nevils, insurance companies can pursue subrogation to recover money their policyholder might win against third parties.

But courts in Missouri, where Nevils lives, do not allow subrogation.

Though a trial judge rejected Nevils’ ensuing class action against Coventry Health Care of Missouri, the Missouri Supreme Court reversed, saying its anti-subrogation statute should supersede the federal law..

This did not put Nevils in the clear year, however, as the U.S. Supreme Court vacated that ruling in 2015 in light of a new rule by the Office of Personnel Management that says subrogation provisions in insurance contracts should overrule state laws against them.

Despite this reversal, the Missouri Supreme Court ruled against Coventry again last year.

Matthew Wessler, an attorney for Nevils at Gupta Wessler, struggled at Wednesday’s hearing to show that legislative history prevents Coventry from recovering Nevils’ settlement proceeds.

The federal law, FEHBA, stipulates that elements of an insurance contract relating “to the nature, provision or extent of coverage or benefits” supersede contrary state laws.

Justice Samuel Alito balked at Wessler’s position that the federal law would be acceptable if it claimed only to supersede state law that “conflicts with the terms of the contract.”

“Well, boy, if you’re willing to concede that, I don’t see what there is to your argument because that’s, in essence, what this is saying,” Alito said.

Miguel Estrada, an attorney for Coventry with Gibson, Dunn & Crutcher, argued that the federal pre-emption provision here fits with Congress’ intent to create a uniform health benefits marketplace for federal employees.

“It is certainly appropriate for Congress to identify itself the outlines and limits of the preemption than to leave it to ad hoc adjudication of common law claims by the federal courts in this country,” Estrada said.

Assistant to the Solicitor General Zachary Tripp joined the case as an amicus curiae for Coventry and made many of the same arguments as Estrada.

“Under respondent’s position, similarly-situated federal workers working for the same agency, enrolled in the same plan and paying the same premiums would have different benefits and the different extent of benefit payments, depending on whether they lived in Bethesda or McLean,” Tripp said. “We think that’s just clearly wrong.”

The justices appeared more persuaded by Tripp and Estrada’s arguments.

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