Justia Delaware Supreme Court Opinion Summaries

The Supreme Court of the State of Delaware considered an appeal from a decision of the Superior Court regarding the adoption of a Medicare Advantage Plan for State retirees by the State Employee Benefits Committee (SEBC). The Superior Court had found that the SEBC's decision was subject to the requirements of Delaware’s Administrative Procedures Act (APA), granted a motion to stay the implementation of the Medicare Advantage Plan, and required the State to maintain its retirees’ Medicare Supplement Plan. The Superior Court also denied the plaintiffs' application for attorneys’ fees.The Supreme Court of the State of Delaware disagreed with the lower court's ruling. It found that the SEBC's decision to adopt a Medicare Advantage Plan was not a "regulation" as defined by the APA. The court reasoned that the decision did not meet the APA's definition of a regulation because it was not a "rule or standard," nor was it a guide for the decision of future cases. Therefore, the Superior Court did not have jurisdiction to stay the implementation of the plan. The Supreme Court reversed the decision of the Superior Court.On cross-appeal, the plaintiffs argued that the Superior Court erred by refusing to grant their application for attorneys’ fees. However, the Supreme Court found this argument moot because fee shifting is available only against a losing party in favor of a prevailing party. Since the Supreme Court reversed the decision below, fee shifting was foreclosed. View "DeMatteis v. RISE Delaware, Inc." on Justia Law

A case involving Lebanon County Employees' Retirement Fund and Teamsters Local 443 Health Services & Insurance Plan, as plaintiffs-appellants, and Steven H. Collis, Richard W. Gochnauer, Lon R. Greenberg, Jane E. Henney, M.D., Kathleen W. Hyle, Michael J. Long, Henry W. McGee, Ornella Barra, D. Mark Durcan, and Chris Zimmerman, as defendants-appellees, was heard by the Supreme Court of the State of Delaware. The plaintiffs, shareholders in AmerisourceBergen Corporation, brought a derivative complaint against the directors and officers of the Corporation alleging that they failed to adopt, implement, or oversee reasonable policies and practices to prevent the unlawful distribution of opioids. The plaintiffs claimed that this led to AmerisourceBergen incurring liability exceeding $6 billion in a 2021 global settlement related to the Company's role in the opioid epidemic. The Court of Chancery of the State of Delaware initially dismissed the complaint, basing its decision on a separate federal court finding that AmerisourceBergen had complied with its anti-diversion obligations under the Controlled Substances Act. However, the Supreme Court of the State of Delaware reversed the Court of Chancery's dismissal of the complaint, ruling that the lower court had erred in considering the federal court's findings as it changed the date at which demand futility should be considered and violated the principles of judicial notice. The case was remanded for further proceedings. View "Lebanon County Employees' Retirement Fund v. Collis" on Justia Law

Zelda Sheppard appealed a superior court’s affirmance of an Industrial Accident Board (“IAB” or “Board”) decision granting Allen Family Foods’ (“Employer”) Petition for Review (“Petition”). The IAB determined that Sheppard’s prescribed narcotic pain medications were no longer compensable. Sheppard sought to dismiss the Petition at the conclusion of Employer’s case-in-chief during the IAB hearing, arguing that the matter should have been considered under the utilization review process. After hearing the case on the merits, the IAB disagreed, holding that Employer no longer needed to compensate Sheppard for her medical expenses after a two-month weaning period from the narcotic pain medications. On appeal, Sheppard argued the IAB erred as a matter of law when it denied Sheppard’s Motion to Dismiss Employer’s Petition because Employer failed to articulate a good faith change in condition or circumstance relating to the causal relationship of Sheppard’s treatment to the work injury. Accordingly, Sheppard argued that the Employer was required to proceed with the utilization review process before seeking termination of her benefits. The Delaware Supreme Court determined the IAB’s decision was supported by substantial evidence, therefore the superior court’s decision was affirmed. View "Sheppard v. Allen Family Foods" on Justia Law

Appellees, Rite Aid Corporation, Rite Aid Hdqtrs. Corp., and Rite Aid of Maryland, Inc. (collectively, “Rite Aid”), held a general liability insurance policy underwritten by defendany Chubb, Limited ("Chubb"). Rite Aid and others were defendants in multi-district litigation before the United States District Court for the Northern District of Ohio (the “MDL Opioid Lawsuits”). Plaintiffs in that suit filed over a thousand suits in the MDL Opioid Lawsuits against companies in the pharmaceutical supply chain for their roles in the national opioid crisis. Certain suits were bellwether suits - including the complaints of Summit and Cuyahoga Counties in Ohio (“the Counties”) which were at issue here. The question this case presented for the Delaware Supreme Court was whether insurance policies covering lawsuits “for” or “because of” personal injury required insurers to defend their insureds when the plaintiffs in the underlying suits expressly disavowed claims for personal injury and sought only their own economic damages. The Superior Court decided that Rite Aid’s insurance carriers were required to defend it against lawsuits filed by two Ohio counties to recover opioid-epidemic-related economic damages. As the court held, the lawsuits sought damages “for” or “because of” personal injury because there was arguably a causal connection between the counties’ economic damages and the injuries to their citizens from the opioid epidemic. The Supreme Court reversed, finding the plaintiffs, governmental entities, sought to recover only their own economic damages, specifically disclaiming recovery for personal injury or any specific treatment damages. Thus, the carriers did not have a duty to defend Rite Aid under the governing insurance policy. View "ACE American Insurance Company v. Rite Aid Corporation" on Justia Law

A superior court determined State Farm Mutual Auto Insurance Company and State Farm Fire and Casualty Company’s (collectively, “State Farm”) payment practices with Spine Care Delaware, LLC (“SCD”) for medical fees incurred by its Personal Injury Protection (“PIP”) insureds in connection with covered multi-injection spine procedures contravened 21 Del. C. 2118(a)(2). When State Farm received SCD’s charges for a multi-injection procedure performed on one of its PIP insureds, it unilaterally applied a Multiple Payment Reduction (“MPR”) to the charges for injections after the first injection in a manner consistent with Medicare guidelines, paying SCD less than what it charged. SCD sought a declaration that State Farm's application of its MPRs was inconsistent with section 2118(a)(2)’s requirement of reasonable compensation for covered medical expenses, and sought a declaration that State Farm had to pay SCD any reasonable amount charged for PIP-related medical expenses, without applying MPRs. Both parties then moved for summary judgment. The superior court held that State Farm failed to show that the MPR reductions correlated to reasonable charges for the multiple-injection treatments, and thus contravened section 2118(a)(2). On appeal, State Farm contended the superior court incorrectly placed the burden of proof on State Farm to demonstrate that its application of MPRs was reasonable, and that SCD failed to meet its burden of demonstrating that State Farm’s application of MPRs was a failure to pay reasonable and necessary expenses under the statute. Alternatively, State Farm argued that even if it had the burden of proof, it satisfied that burden. The Delaware Supreme Court agreed with State Farm's first premise, that the superior court erred in assigning State Farm the burden of proof. Judgment was reversed and the matter remanded for further proceedings. View "State Farm v. Spine Care Delaware" on Justia Law

Ashlee Oldham and Robert Prunckun (collectively, “Recipients”) were the only two Delaware Medicaid recipients housed at Judge Rotenberg Center (“JRC”), a facility in Massachusetts and the only facility in the United States known to use electric shock therapy as part of their comprehensive behavioral treatment plans. These services were covered by Medicaid with the knowledge and approval of Delaware’s Department of Health and Social Services (“DHSS”). in 2012, the Center for Medicare and Medicaid Services (“CMS”) advised the Massachusetts state agency responsible for Medicaid administration that continued use of electric shock therapy would place that state’s waiver program in jeopardy of losing federal funding. Following CMS’s letter to Massachusetts, Delaware took measures to avoid placing its own Home and Community Based Services (“HCBS”) waiver program at risk. DHSS finally terminated JRC as a qualified provider after JRC refused to cease using electric shock therapy. Although the procedural history was complex, the gist of Appellants’ challenge on appeal to the Delaware Supreme Court was that they were denied due process because Delaware’s administrative hearing officer bifurcated proceedings to address what she concluded was a threshold issue, namely, whether electric shock therapy was a covered Medicaid service under the Medicaid HCBS Waiver program. Instead, Recipients contended they should have been allowed to introduce evidence that electric shock therapy was medically necessary, and that by removing shock services, DHSS threatened Recipients’ ability to remain in a community-based setting (a conclusion they desired to prove through evidence and expert testimony). The Supreme Court determined the hearing officer's determination that electric shock therapy was not a covered service under federal and state law was supported by substantial evidence and free from legal error, and affirmed the district court. View "Prunckun v. Delaware Dept. of Health & Social Services" on Justia Law

A group of New York-based third party payor health insurers (“TPPs”) that provided prescription drug benefits to union members appealed a Superior Court judgment dismissing with prejudice their second amended complaint. At issue were claims brought by the TPPs under various state consumer fraud laws against AstraZeneca Pharmaceuticals LP, and Zeneca Inc. (collectively “AstraZeneca”). The TPPs alleged that AstraZeneca falsely advertised its more expensive patented prescription drug "Nexium" as superior to the less expensive generic drug "Prilosec," causing the TPPs to overpay for Nexium when generic Prilosec would have sufficed. After conducting an extensive choice of law analysis, the Superior Court determined that New York law controlled the TPPs’ claims. The court then held that the TPPs failed to state a claim under New York’s consumer fraud statute for failure to allege legally sufficient causation. The TPPs appealed, arguing the Superior Court's choice of law analysis was flawed, and that the Superior Court's causation analysis was equally flawed. After a careful review of the record on appeal, the Delaware Supreme Court affirmed the ultimate judgment of the Superior Court, finding it not necessary to discuss whether the Superior Court correctly analyzed the choice of law issue, because under either state consumer fraud statute the TPPs could not recover damages as a matter of law. View "Teamsters Local 237 Welfare Fund, et al. v. AstraZeneca Pharmaceuticals LP" on Justia Law

Plaintiff Diane Stayton suffered serious burns while a resident at Harbor Healthcare and Rehabilitation Center ("Harbor Healthcare"), a skilled nursing center in Lewes. She sued alleging medical negligence against those responsible for her care. In addition to general damages, Stayton sought special damages for the cost of her medical care after she was burned. Absent Medicare coverage, the burn hospital and other providers who treated her for her injuries would have billed Stayton $3,683,797.11. Because Stayton qualified for Medicare, the Centers for Medicare and Medicaid Services ("CMS") paid Stayton's healthcare providers $262,550.17 in full satisfaction of the expense of Stayton's hospital stay and other care. Medicare regulations required the write-off of $3,421,246.94, and Stayton's healthcare providers could not "balance bill" her for the amount written off. Defendants moved for judgment on the pleadings seeking judgment as a matter of law that Stayton's medical expense damages were limited to the amount actually paid by CMS, rather than the amount Stayton might have been billed for her care. Stayton opposed the motion, relying on the collateral source rule. The Superior Court granted defendants' motion, and limited Stayton's medical expense claim to the amount paid by CMS. The court decided that the collateral source rule did not apply to amounts required by federal law to be written off by healthcare providers. On appeal to the Supreme Court, Stayton argued that the Superior Court should have applied the collateral source rule to the Medicare write-offs. The Supreme Court concluded the collateral source rule did not apply to amounts required to be written off by Medicare. "Where a healthcare provider has treated a plaintiff covered by Medicare, the amount paid for medical services is the amount recoverable by the plaintiff as medical expense damages." View "Stayton v. Delaware Health Corporation, et al." on Justia Law

The patient in this case alleged that his physician negligently performed a surgical procedure and breached his duty to obtain informed consent. The patient also sued the supervising health services corporation based on vicarious liability and independent negligence. The jury found both the physician and the corporation negligent and apportioned liability between them. On appeal, the physician and corporation argued the trial court erred in several evidentiary rulings, incorrectly instructed the jury on proximate cause, and wrongly awarded pre- and post-judgment interest. In cross appeals, the physician and corporation sought review of the trial court’s decision to submit a supplemental question to the jury, as well as its failure to alter the damages award based on the jury’s response to that supplemental question. The Supreme Court affirmed the judgment in favor of the patient. The trial court should not have requested supplemental information from the jury after the verdict. Although the trial court decided not to modify the verdict, the jury’s response to the supplemental question arguably could have affected other proceedings between the physician and corporation. The case was remanded with instructions to the Superior Court to vacate the supplemental verdict. View "Shapria, M.D. et al. v. Christiana Care Health Services, Inc., et al." on Justia Law

The Board appealed from a Superior Court decision reversing the Board's decision to suspend the nursing licenses of appellee. The Board suspended appellee's licenses for two years based upon a finding that she failed to report child sexual abuse as required by state statute. The Board contended that it did not err in finding that appellee committed the violations at issue and the Board submitted that its decision finding a violation of the applicable provisions was supported by substantial evidence. Appellee argued that the Board's appeal was barred by a conflict of interest. The court concluded that the Board's contentions were without merit. Therefore, the judgment of the Superior Court must be affirmed and the court need not reach the conflict of interest issue. View "Delaware Board of Nursing v. Gillespie" on Justia Law