Ruiz v. Rhode Island

GENARO RUIZ, Plaintiff, v. STATE OF RHODE ISLAND, et al., Defendants.

C.A. No. 16-507WES

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND

April 27, 2020

MEMORANDUM AND ORDER

PATRICIA A. SULLIVAN, United States Magistrate Judge.

At a Court-annexed mediation held on April 29, 2019, Plaintiff Genaro Ruiz and all Defendants, including the State of Rhode Island ("State") and others,¹ entered into what all parties concur is a binding agreement to settle this case arising under 42 U.S.C. § 1983 ("Settlement Agreement"). Based on a 2013 incident, the complaint alleged excessive force during arrest and wrongful detention resulting in serious injuries requiring medical treatment in a hospital after Plaintiff unwittingly picked up a heroin-filled package left on the porch of his three-unit apartment building by law enforcement in connection with what Plaintiff claims was a poorly planned controlled delivery. During the mediation, all Defendants denied liability but bargained for complete closure of the case, while Plaintiff sought payment of a sum of money as compensation. The resulting Settlement Agreement is consistent with these purposes; it is reflected in a Release of All Claims ("Release") that Plaintiff executed on June 7, 2019, reciting that, in consideration for $55,000 (the "Settlement Proceeds") for his "loss and damages," allclaims against all Defendants would be fully and finally released forever and the case would be dismissed with prejudice. Ex. A, ECF No. 100-1.²

In the Release, Plaintiff acknowledged that, to the extent that he was a Medicare beneficiary, it was his responsibility to resolve any Medicare claim. However, during the negotiations, the parties did not discuss how Defendants would obtain closure with respect to any possible Medicare claim or lien. In particular, during the mediation, Plaintiff never advised Defendants that he would refuse to supply his social security number ("SSN"), or any part of it, to facilitate implementation of the Settlement Agreement by allowing the State to ascertain whether Plaintiff was a Medicare beneficiary or to comply with the federal reporting requirement imposed by 42 U.S.C. § 1395y(b)(8)(A-B). Similarly, during the mediation, Defendants never advised Plaintiff that the submission of his SSN, or any part of it, for the purpose of compliance with the Medicare statutory reporting requirement, was a precondition to paying the Settlement Proceeds. During the post-settlement period, as the parties worked to implement the Settlement Agreement, Defendants consistently requested the specified information needed to comply with 42 U.S.C. § 1395y(b)(8)(A-B), including Plaintiff's SSN, and Plaintiff omitted it from what he provided, while remaining silent regarding his intent to refuse to provide it. After Plaintiff finally clearly articulated his position that he would never supply his SSN, or any part of it, the State refused to pay the Settlement Proceeds and the parties turned to the Court for assistance in getting the Settlement Agreement consummated.

Now pending before me for determination pursuant to 28 U.S.C. § 636(b)(1)(A) are the parties' dueling motions seeking resolution of this dispute. Advanced Voice Commc'ns, Inc. v. Gain, No. C.A. 09-56ML, 2010 WL 677459, at *1 (D.R.I. Feb. 25, 2010) (motion to enforcesettlement agreement appropriately referred to magistrate judge for determination). Plaintiff moved to enforce the Settlement Agreement³ and for an award of attorneys' fees, punitive damages and interest. ECF No. 100. Defendants have moved to compel Plaintiff to comply with what they interpreted as a consented-to Order of the Court requiring Plaintiff either to provide his SSN or to provide an affidavit averring that he does not have an SSN. ECF No. 102. Following extensive proceedings, including two hearings, both motions are now ripe. For the reasons that follow, Plaintiff's motion is granted in part and denied in part, while Defendants' motion is denied as moot.

I. BACKGROUND - LAW AND FACTS

A. Plaintiff's Background

Plaintiff is an older individual who was approximately sixty years old⁴ at the time of the incident (in 2013) that underpins his claim. During his deposition, Plaintiff testified that the arrest and incarceration caused him to develop a serious medical condition and resulted in a week-long hospitalization. See generally ECF No. 101-2; id. at 42-43. Inconsistent with this testimony, Plaintiff submitted a document from the Rhode Island Hospital reflecting that he has incurred a total of only $2501.28 in hospital charges from 2013 through 2017, all which were paid in full by "patient." ECF No. 100-5. As of the date of the incident, Plaintiff had been employed; discovery materials related to his employment displayed the last four digits of anSSN. ECF No. 101-2 at 48-49. According to a declaration Plaintiff signed on August 16, 2016 (long after the Settlement Agreement was finalized and the parties were sparring about whether he would provide his SSN), Plaintiff averred: "I have never been enrolled in nor applied for Medicare, Medicaid, or any government health insurance program. . . . I paid the total amount due myself." ECF No. 100-6 ¶¶ 11, 13. This declaration further states, "I did not agree to provide a[n SSN] as a term of the settlement of this case. . . . I will not provide a[n SSN] as a term of the settlement of this case." Id. ¶¶ 14-15. Very recently, Plaintiff's counsel informed Defendants that he will not disclose "a[n SSN], the last five digits, or any digits of such number." ECF No. 115-1 at 3.

B. Federal Law Imposing Medicare Reporting Requirements

Enacted in 1965, Medicare is a federally funded and administered health insurance program for certain groups, primarily elderly (age sixty-five and older) and disabled persons. Health Insurance of the Aged Act, Title I of Social Security Amendments of 1965, Pub. L. No. 89-97, 79 Stat. 286 (July 30, 1965). The Department of Health and Human Services ("HHS") administers Medicare through the Centers for Medicare and Medicaid Services ("CMS"). In re Plavix Mktg., Sales Practices & Prod. Liab. Litig., 123 F. Supp. 3d 584, 602 (D.N.J. 2015).

Since 2007,⁵ pursuant to the Medicare, Medicaid and SCHIP Extension Act, ("MMSEA"), specifically 42 U.S.C. § 1395y(b)(8)(A-B), any self-insured entity⁶ paying a liability settlement must submit "information as [HHS] shall specify," § 1395y(b)(8)(B)(ii)("specified information"), regarding the beneficiary of the settlement or judgment into a CMS portal to determine the Medicare status of the injured party. In re Asbestos Prod. Liab. Litig., Civil Action No. 12-cv-60048, 2013 WL 2367790, at *3 (E.D. Pa. May 30, 2013); see Seger v. Tank Connection, LLC, No. 8:08CV75, 2010 WL 1665253, at *4 n.3 (D. Neb. Apr. 22, 2010) (MMSEA "requir[es] . . . self-insurers to provide[] detailed information regarding all liability settlements" by submitting query). In holding that the reporting requirement applies to all settlements, not just to those with known Medicare beneficiaries, these cases emphasize that a purpose of the § 1395y(b)(8)(A)(i) query requirement is to protect the self-insured entity that would otherwise be at the mercy of a claimant's untested averment that he was not a Medicare beneficiary. See Bey v. City of New York, No. CV 2011-5833(BMC)(MDG), 2013 WL 439090, at *1-2 (E.D.N.Y. Feb. 5, 2013) (collection of SSN is a "'required, legitimate and necessary use of the SSN under federal law,' . . . even where a plaintiff has a reasonable argument that he would not qualify for such benefits"); Hackey v. Garofano, No. CV095031940S, 2010 WL 3025597, at *4 (Conn. Super. Ct. July 1, 2010) (appropriate for insurer to ask for SSN of sixteen-year-old plaintiff and his uninjured father to comply with § 1395y(b)(8)). The failure to make such a query within a specified time period potentially exposes the entity paying the settlement or judgment to a fine of $1000 per day, as well as, by offset or by direct collection, up to double any amounts paid by Medicare on behalf of the injured party. 42 U.S.C. § 1395y(b)(8)(E)(i); 42 C.F.R. § 411.24(c). Such reimbursement to Medicare must be made even though the self-insured entity has already paid the settlement proceeds to the beneficiary. 42 C.F.R. § 411.24(i).

Until 2013, the specified information required by CMS to make this query, as mandated by MMSEA, unambiguously included the injured party's full SSN. In re Asbestos Prod. Liab. Litig., 2013 WL 2367790, at *3 ("query must contain the injured party's [SSN]") (quoting CMSUser Guide); Bey, 2013 WL 439090, at *1 ("Disclosure of a plaintiff's information such as an SSN . . . is 'necessary for the defendant to comply with its statutory duty to report.'"); Seger, 2010 WL 1665253, at *4 n.3 ("[SSN] is essential to the administration of the Medicare program. Collection of the SSNs for the purpose of coordinating benefits with Medicare is a required, legitimate and necessary use of the SSN under federal law."); Hackley, 2010 WL 3025597, *4 (Medicare "reporting requirements affect all parties involved in a payment of a settlement"; therefore, it is permissible for insurer to condition disbursement of settlement fund on SSN from claimant) (emphasis in original). However, in 2013, Congress amended § 1395y(b)(8)(B)(ii) with the passage of § 204 of the SMART Act, Public Law 112-242, H.R. 1845, (112th Cong. Jan. 10, 2013) ("SMART Act"). In pertinent part, § 204 provides:

Not later than 18 months after January 10, 2013, the Secretary shall modify the reporting requirements under this paragraph so that an applicable plan in complying with such requirements is permitted but not required to access or report to the Secretary beneficiary social security account numbers or health identification claim numbers, except that the deadline for such modification shall be extended by one or more periods (specified by the Secretary) of up to 1 year each if the Secretary notifies the committees

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