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Wednesday, August 07, 2013

Are "burn your Obamacare card" proponents incurring potential liability?

Progressives have been first dumbfounded, and then enraged, by the right-wing campaign to convince the uninsured not to purchase health insurance on the exchanges established by the Affordable Care Act.. The young, healthy uninsured whom the exchanges need to sign up in order to thrive are being urged to "burn your Obamacare draft card," as the Koch-funded Freedomworks puts it.  Here's Kevin Drum's reaction:
Nice. I wonder if FreedomWorks plans to help out the first person who takes them up on this and then contracts leukemia? I'm guessing probably not.

What's next? A campaign to get people to skip wearing seat belts? To skip using baby seats in cars? To skip vaccinations for their kids? It's times like this that words fail those of us with a few remaining vestiges of human decency.
There may be legal ramifications to Drum's question.  Might those who gratuitously offer a kind of malign financial advice to the general public -- in particular, to a disproportionately young and poor segment of the public -- incur liability?

My first thought was that groups like Freedomworks might conceivably be sued by an individual who takes their advice, eschews insurance available on the exchanges (perhaps offered with a steep subsidy), and then becomes seriously ill or gets in a car accident and racks up tens or hundreds of thousands of dollars in medical bills. (That person can't simply buy insurance as soon as she's sick or injured. As Adrianna McIntyre has pointed out, the ACA has limited enrollment periods -- six months at present, three months going forward.)

I don't yet know whether there are grounds for such a suit.  But it does seem that insurance companies selling insurance on the exchanges might have grounds to sue if such campaigns are measurably successful (e.g., if the sponsors are dumb enough to brag about how many "draft card" burners they attract).  Or perhaps the state or federal agency running an exchange could file suit against those who deprive them of the enrollees they need to thrive.

The grounds to sue would be "tortious interference with prospective contractual relations."  That tort is described as follows by Tom Muskus, J.D., in American Jurisprudence, Second Edition, updated May 2013 (my emphasis):
Typically, this cause of action occurs when the defendant has taken some action which dissuades potential customers of the plaintiff from entering into actual contractual relationships with the plaintiff. Such actions may occur in a multitude of factual situations. The plaintiff must demonstrate that the defendant took such action, that it caused the third party or parties not to do business with the plaintiff, that the plaintiff was monetarily damaged thereby, and that the nature of the action, taken in the context of the entire factual situation, was not justified... if a person, out of pure malice and spite for the plaintiff, makes false and defamatory statements about the plaintiff and the plaintiff's products, etc., resulting in lost business, such action would normally be deemed “improper,” and a cause of action for wrongful interference would properly lie (IV. Particular Interference Situations, C. Situations Not Involving Contract, § 48. Interference with business relationship or business expectancy).

In the uniquely malign campaign of sabotage against the Affordable Care Act there are plenty of "false and defamatory statements" to go around. A brochure titled "Refuse to Enroll in Obamacare Health Exchange," for example, produced by the Citizens Council for Healthcare Freedom, lists first among the "top four reasons not to enroll":
No Private Insurance -- Obamacare is "Medicaid for the middle class"--- or as CBO director Douglas Holtz-Eakin calls Exchange coverage: "a second Medicaid program."
That, your Honor, is a flat-out lie, leveraging a sloppy metaphoric slur of Holtz-Eakin's and converting it, like a subprime mortgage in an AAA-rated CDO tranche, into bogus fact.  Real, live publicly and privately held businesses are selling honest-to-God American for-profit insurance on the exchanges.  Recall that there is no public option -- it was killed dead by Joe Lieberman and his "centrist" ilk. There is nothing but private insurance on the exchanges.

I assume that a suit alleging business harm caused by these disinformation campaigns would face significant hurdles, beginning with the difficulty of proving that the campaign materially harmed an exchange or companies selling insurance within it.  There are ambiguities as to who is entitled to offer what kind of advice to whom, though it's my unprofessional impression that the rules may in this case favor the plaintiff. The test for whether advice offered by an "amateur" is proper requires (1) that advice be requested, (2) that the advice given be within the scope of the request and (3) that the advice be honest.

The requirement of honesty may favor the defendant, as nothing but good faith is required, and the refusenik crowd may claim to believe their own nonsense. But the advice must be within the scope of a specific request unless the adviser is someone "charged with some responsibility for the protection of the welfare of another," e.g. someone in loco parentis, a minister, lawyer, teacher, or fiduciary (Law of Torts, §770). 
Again, the advice, whoever offers it, is improper "if a person, out of pure malice and spite for the plaintiff, makes false and defamatory statements about the plaintiff and the plaintiff's products."  Pure malice, like willful dishonesty, may be hard to prove. But egregious material misrepresentation by sophisticated political operatives might be offered as proof of malice. 

What about suits by the most obviously injured parties -- those induced to forgo insurance who later find themselves in dire need of it? A PAC or 501(c)3 ain't no fiduciary.  But if it acts like one, and broadcasts financial advice that grievously harms the recipient, can that injured party  sue? Lawyers (Ragbatz?), please consider this an open query.

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