[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 15-14353

________________________

D.C. Docket No. 1:15-cv-21532-JLK

MSP RECOVERY, LLC, 

 Plaintiff - Appellant, 

versus

ALLSTATE INSURANCE COMPANY, 

 Defendant - Appellee. 

________________________

No. 15-12398

________________________

D.C. Docket No. 1:15-cv-20213-UU

MSP RECOVERY, LLC, 

 Plaintiff - Appellant,

versus

PROGRESSIVE SELECT INSURANCE COMPANY, 

 Defendant - Appellee. 

Case: 15-14353 Date Filed: 08/30/2016 Page: 1 of 25 
2

________________________

No. 15-12402

________________________

D.C. Docket No. 1:15-cv-20208-UU

MSP RECOVERY, LLC, 

 Plaintiff - Appellant,

versus

PROGRESSIVE SELECT INSURANCE COMPANY, 

 Defendant - Appellee. 

________________________

No. 15-12403

________________________

D.C. Docket No. 1:15-cv-20616-FAM

MSP RECOVERY, LLC, 

 Plaintiff - Appellant,

versus

PROGRESSIVE SELECT INSURANCE COMPANY, 

 Defendant - Appellee. 

Case: 15-14353 Date Filed: 08/30/2016 Page: 2 of 25 
3

________________________

No. 15-14355

________________________

D.C. Docket No. 1:15-cv-21687-JLK

MSPA CLAIMS 1, LLC, 

 Plaintiff - Appellant,

versus

IDS PROPERTY CASUALTY INSURANCE COMPANY, 

 Defendant - Appellee. 

________________________

No. 15-14356

________________________

D.C. Docket No. 1:15-cv-21504-JLK

MSPA CLAIMS 1, LLC, 

 Plaintiff - Appellant,

versus

INFINITY AUTO INSURANCE COMPANY, 

 Defendant - Appellee. 

Case: 15-14353 Date Filed: 08/30/2016 Page: 3 of 25 
4

________________________

No. 15-14790

________________________

D.C. Docket No. 1:15-cv-20732-RNS

MSP RECOVERY, LLC, 

 Plaintiff - Appellant,

versus

ALLSTATE INSURANCE COMPANY, 

 Defendant - Appellee. 

________________________

Appeals from the United States District Court

for the Southern District of Florida

________________________

(August 30, 2016)

Before ED CARNES, Chief Judge, ANDERSON, Circuit Judge, and TITUS,* 

District Judge.

ANDERSON, Circuit Judge: 

These seven consolidated1 cases present the question of whether a 

contractual obligation, without more (specifically, without a judgment or 

 

* Honorable Roger W. Titus, United States District Judge for the District of Maryland, sitting by 

designation.

Case: 15-14353 Date Filed: 08/30/2016 Page: 4 of 25 
5

settlement agreement from a separate proceeding), can satisfy the “demonstrated 

responsibility” requirement of the private cause of action provided for by the

Medicare Secondary Payer Act (the “MSP Act”). 42 U.S.C. §§ 1395y(b)(2)(B)(ii), 

(b)(3)(A). We hold that it can.

I. BACKGROUND

In 1980, Congress passed the MSP Act to reduce the costs of Medicare.

Glover v. Liggett Grp., Inc., 459 F.3d 1304, 1306 (11th Cir. 2006). Prior to the 

Act’s passage, Medicare often acted as a primary insurer; that is, Medicare paid for 

enrollees’ medical expenses, even when an enrollee carried other insurance that 

covered the same costs, or when a third party had an obligation to pay for them.

The MSP Act, as its name suggests, changed that relationship so that Medicare acts 

as a secondary payer. “This means that if payment for covered services has been or 

 

1 The following appeals were previously consolidated and set for oral argument before this panel

on June 9, 2016: Nos. 15-14353, 15-14355, 15-14356 and 15-14790. Similarly, the following 

appeals were previously consolidated and set for oral argument in a different slot also before this 

panel on June 9, 2016: Nos. 15-12398, 15-12402 and 15-12403. We sua sponte consolidate all of 

the appeals, and we dispose of all of them in this single opinion. Oral argument in all of these 

appeals was continued in two orders of this Court dated June 2, 2016. We unanimously 

determine that these appeals will be decided on the briefs without oral argument. See 11th Cir. R. 

34-3(f).

Case: 15-14353 Date Filed: 08/30/2016 Page: 5 of 25 
6

is reasonably expected to be made by someone else, Medicare does not have to 

pay.” Cochran v. U.S. Health Care Fin. Admin., 291 F.3d 775, 777 (11th Cir.

2002). The MSP Act prohibits Medicare from paying for items or services if 

“payment has been made or can reasonably be expected to be made under a 

workmen’s compensation law or plan of the United States or a State or under an 

automobile or liability insurance policy or plan (including a self-insured plan) or 

under no fault insurance.” 42 U.S.C. § 1395y(b)(2)(A)(ii). If, however, a primary 

payer—in the parlance of the statute, a “primary plan”—“has not made or cannot 

reasonably be expected to make payment with respect to the item or service 

promptly,” Medicare may make a payment on the enrollee’s behalf, conditioned on 

reimbursement from the primary plan. Id. § 1395y(b)(2)(B)(i); see also Cochran, 

291 F.3d at 777 (“In order to accommodate its beneficiaries, however, Medicare 

does make conditional payments for covered services, even when another source 

may be obligated to pay, if that other source is not expected to pay promptly.”).

We pause here to note that, though the MSP Act uses the term “primary 

plan” to describe entities with a primary responsibility to pay, that term covers 

more than just health insurance plans. The law defines a “primary plan” as “a 

group health plan or large group health plan, . . . a workmen’s compensation law or 

plan, an automobile or liability insurance policy or plan (including a self-insured 

Case: 15-14353 Date Filed: 08/30/2016 Page: 6 of 25 
7

plan) or no fault insurance . . . .” 42 U.S.C. § 1395y(b)(2)(A).2 Thus, it is clear that 

the defendants in this case—which are all personal injury protection no-fault 

carriers—are primary plans within the meaning of the MSP Act.

The mechanics of the reimbursement process are set out in the statute as 

follows. The law requires a primary plan to reimburse Medicare “if it is 

demonstrated that such primary plan has or had a responsibility to make payment 

with respect to such item or service.” 42 U.S.C. § 1395y(b)(2)(B)(ii). The statute 

proceeds to explain how that responsibility may be demonstrated:

responsibility for such payment may be demonstrated by a judgment, 

a payment conditioned upon the recipient’s compromise, waiver, or 

release (whether or not there is a determination or admission of 

liability) of payment for items or services included in a claim against 

the primary plan or the primary plan’s insured, or by other means.

Id. This is the demonstrated responsibility requirement; in other words, Medicare 

may obtain reimbursement from a primary plan if it demonstrates that the primary 

plan “has or had a responsibility” to pay for the item or service. To facilitate 

recovery of these payments, the law provides for a right of action by the United 

States, for double damages, against “any or all entities that are or were required or 

responsible” to make payment under a primary plan. Id. § 1395y(b)(2)(B)(iii).

 

2 In 2003, Congress expanded the definition of the term “primary plan” further, to specify that 

“[a]n entity that engages in a business, trade, or profession shall be deemed to have a self-insured 

plan if it carries its own risk.” 42 U.S.C. § 1395y(b)(2)(A).

Case: 15-14353 Date Filed: 08/30/2016 Page: 7 of 25 
8

In addition to the right of action by the United States, Congress created a 

private cause of action against a primary plan that fails to provide for primary 

payment. Id. § 1395y(b)(3)(A). Like the cause of action provided to the United 

States, the private cause of action also permits the plaintiff to recover double 

damages. Id.3

B. Factual and Procedural History

The seven consolidated cases in this appeal all involve attempts by assignees 

of a health maintenance organization (“HMO”) to recover conditional payments 

via the MSP Act’s private cause of action. The facts relevant to the issues raised on 

appeal are similar in each case. Plaintiffs MSP Recovery LLC (“MSP Recovery”)

and MSPA Claims 1, LLC (“MSPA Claims 1”) are firms that obtain claims for 

reimbursement under the MSP Act from HMOs that offer Medicare Advantage 

Plans. Defendants are all insurance companies that provide personal injury 

protection (“PIP”) no-fault insurance to automobile owners and operators in 

Florida. In each case, a person covered by a defendant’s PIP no-fault insurance 

policy was injured in an automobile accident. Each such insured was also enrolled 

 

3 However, it is important to note that the private right of action created by subsection (b)(3)(A) 

does not provide for a qui tam action, whereby a private person might bring a lawsuit on behalf 

of the government. Rather, the MSP Act’s private cause of action “merely enables a private party 

to bring an action to recover from a private insurer only where that private party has itself 

suffered an injury because a primary plan has failed to make a required payment to or on behalf 

of it.” Woods v. Empire Health Choice, Inc., 574 F.3d 92, 101 (2d Cir. 2009).

Case: 15-14353 Date Filed: 08/30/2016 Page: 8 of 25 
9

in a Medicare Advantage Plan provided by Florida Healthcare Plus (“FHCP”), an 

HMO. FHCP made conditional payments on behalf of the injured persons to cover 

medical expenses in each accident. FHCP assigned its claims under the MSP Act, 

and Plaintiffs are the current assignees. Plaintiffs allege that, under the MSP Act, 

FHCP was a secondary payer, and Defendants were primary plans with obligations 

to pay some of their insureds’ medical costs. Defendants’ responsibility to pay, 

Plaintiffs assert in their complaints, is demonstrated by the insurance contracts the 

injured persons entered into with Defendants. Plaintiffs filed suit in the Southern 

District of Florida seeking double damages under 42 U.S.C. § 1395y(b)(3)(A).

All of the consolidated cases were dismissed. In each case, the district court 

relied on our opinion in Glover v. Liggett Group, Inc. In a case in which the 

defendant was an alleged tortfeasor, Glover held that a primary plan’s 

responsibility to pay must be demonstrated before the plaintiff files a claim under 

the MSP Act. 459 F.3d at 1309. When the primary plan’s responsibility to pay 

arises from tort liability, we held in Glover, liability might be demonstrated by a 

judgment or settlement, but the tortfeasor’s liability cannot be “demonstrated” 

through the MSP Act claim itself. Id. In other words, a federal lawsuit under the 

MSP Act cannot serve as a substitute for determining liability via a standard tort 

claim; the tortfeasor’s responsibility to pay must be independently established. The 

Case: 15-14353 Date Filed: 08/30/2016 Page: 9 of 25 
10

courts below held that the requirement we established in Glover—that a primary 

plan’s responsibility to pay be demonstrated through a judgment or agreement 

separate from the MSP claim—applies even when the primary plan’s alleged 

responsibility to pay is contractual, as it is in these cases, rather than the result of 

tort liability. The primary plan’s alleged responsibility to pay in these cases is 

contractual because responsibility to pay is determined by construction of the PIP 

no-fault insurance policies issued by Defendants to each insured, whose medical 

expenses were conditionally paid by Plaintiffs’ Medicare Advantage Organization

predecessors. Accordingly, because Plaintiffs did not obtain a judgment on the 

insurance contracts prior to bringing their MSP Act claims, the district courts 

dismissed Plaintiffs’ suits for failure to state a claim. Plaintiffs urge us to hold that 

Glover applies only when the responsibility to pay arises from tort, and that 

alleging the existence of a contractual obligation to pay suffices to demonstrate a 

primary payer’s responsibility under the MSP Act private cause of action.

II. STANDARD OF REVIEW

We review a district court’s decision granting a motion to dismiss de novo.

Hill v. White, 321 F.3d 1334, 1335 (11th Cir. 2003). “To survive a motion to 

dismiss, a complaint must state a claim to relief that is plausible on its face, 

meaning it must contain factual content that allows the court to draw the 

Case: 15-14353 Date Filed: 08/30/2016 Page: 10 of 25 
11

reasonable inference that the defendant is liable for the misconduct alleged.” 

Bishop v. Ross Earle & Bonan, P.A., 817 F.3d 1268, 1270 (11th Cir. 2016) 

(internal quotation marks omitted).

III. DISCUSSION

A. Standing

Before proceeding to the merits of this appeal, we address whether Plaintiffs 

have standing to bring this suit. The Constitution confines federal courts’ 

jurisdiction to “cases” and “controversies.” U.S. Const. Art. III, § 2. “[T]he core 

component of standing is an essential and unchanging part of the case-orcontroversy requirement of Article III.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 

560, 112 S. Ct. 2130, 2136, 119 L. Ed. 2d 351 (1992). Federal courts have an 

independent obligation to ensure that subject-matter jurisdiction exists to hear a 

case, and dismissal is warranted if a court determines that it lacks jurisdiction. In re 

Trusted Net Media Holdings, LLC, 550 F.3d 1035, 1042 (11th Cir. 2008). “[T]he 

irreducible constitutional minimum of standing contains three elements.” Lujan, 

504 U.S. at 560, 112 S. Ct. at 2136. A plaintiff who invokes the jurisdiction of a 

federal court bears the burden to show “(1) an injury in fact, meaning an injury that 

is concrete and particularized, and actual or imminent, (2) a causal connection 

between the injury and the causal conduct, and (3) a likelihood that the injury will 

Case: 15-14353 Date Filed: 08/30/2016 Page: 11 of 25 
12

be redressed by a favorable decision.” Granite State Outdoor Adver., Inc. v. City of 

Clearwater, 351 F.3d 1112, 1116 (11th Cir. 2003). The standing issue in the instant 

case concerns the first element: injury in fact.

Defendant IDS Property Casualty Insurance Company (“IDS”) argues that 

Plaintiff MSPA Claims 1 lacks standing to bring suit because it has suffered no 

legally cognizable injury. IDS points out that any cause of action in the seven

consolidated cases originally belonged to FHCP. MSPA Claims 1 is the assignee of 

FHCP’s claims against IDS. IDS argues that the assignments were invalid and that 

MSPA Claims 1 therefore suffered no legally cognizable injury. Though IDS was 

the only defendant to raise the issue, its argument applies equally in all of these 

cases, because similar purported assignments occurred in each case. If IDS is 

correct that the assignments of the claims to Plaintiffs were invalid, then we must 

dismiss each of these cases for lack of jurisdiction.

MSPA Claims 1’s complaint alleges that the causes of action it asserts 

initially belonged to FHCP, and that MSPA Claims 1 obtained the claims through a 

series of assignments.4 IDS’s argument that these assignments were invalid relies 

on the fact that Medicare Advantage Organizations like FHCP must enter into a 

 

4 Defendants also argue that the private cause of action provided by the MSP Act does not extend 

to Medicare Advantage Organizations such as FHCP. Defendants’ argument is foreclosed by our 

recent decision in Humana Medical Plan, Inc. v. Western Heritage Insurance Co., __ F.3d __,

No. 15-11436, 2016 WL 4169120, at *6 (11th Cir. Aug. 8, 2016).

Case: 15-14353 Date Filed: 08/30/2016 Page: 12 of 25 
13

contract with the federal government to offer Medicare Advantage Plans. IDS 

points out that federal law generally prohibits assignment of contracts between the 

federal government and third parties. Therefore, IDS argues, assignment of the 

claim was barred by a federal statute. The anti-assignment statute reads:

The party to whom the Federal Government gives a contract or order 

may not transfer the contract or order, or any interest in the contract or 

order, to another party. A purported transfer in violation of this 

subsection annuls the contract or order so far as the Federal 

Government is concerned, except that all rights of action for breach of 

contract are reserved to the Federal Government.

41 U.S.C. § 6305(a).

The assumption underlying IDS’s argument appears to be that a Medicare 

Advantage Organization’s standing to bring a claim under the MSP Act is 

derivative of its contractual relationship with Medicare. It is unclear why IDS 

believes that to be the case. Plaintiffs’ MSP Act claims are not claims on FHCP’s 

contract with the government, and there is no allegation that anyone has breached 

such a contract. The MSP Act’s private cause of action does not require any sort of 

relationship (contractual or otherwise) with the government (or anyone else) as a 

prerequisite to suit. FHCP’s contract with Medicare simply permits it to provide 

insurance plans that offer Medicare benefits. The contract does not provide for any 

special right of recovery under the private cause of action of the MSP Act. There is 

no allegation that FHCP transferred that contract, or any interest in the contract, to 

Case: 15-14353 Date Filed: 08/30/2016 Page: 13 of 25 
14

MSPA Claims 1. MSPA Claims 1 did not undertake to do anything that FHCP is 

obligated to do under its contract with the government, nor did MSPA Claims 1

obtain any rights against the federal government. Rather, FHCP assigned to 

Plaintiffs here a claim created by statute, one that is entirely separate from its 

contract with Medicare. Because FHCP did not assign its contract with the 

government, or any interest therein, the assignment is not prohibited by § 6305,

and IDS’s standing argument must fail.

B. Demonstrated Responsibility

The primary issue in these consolidated cases is the operation of the 

demonstrated responsibility provision of the MSP Act. The text of the MSP Act, 

however, is remarkably abstruse. Therefore, we begin our discussion of the merits 

with a comprehensive review of the structure of the private cause of action before 

analyzing the application of that particular provision.

1. Structure of the MSP Act Private Cause of Action

The text of the private cause of action provided for by the MSP Act is 

challenging to parse. It reads:

There is established a private cause of action for damages (which shall 

be in an amount double the amount otherwise provided) in the case of 

a primary plan which fails to provide for primary payment (or 

appropriate reimbursement) in accordance with paragraphs (1) and 

(2)(A).

Case: 15-14353 Date Filed: 08/30/2016 Page: 14 of 25 
15

42 U.S.C. § 1395y(b)(3)(A). One difficulty in understanding the text stems from 

the fact that a primary plan is only liable when it fails to pay “in accordance with”

paragraphs (1) and (2)(A). The ambiguity arises because the demonstrated 

responsibility requirement at the heart of this case is contained in neither of the 

paragraphs referenced in the private cause of action provision. That is, the 

demonstrated responsibility requirement is not contained in either paragraph (1) or 

in paragraph (2)(A). Rather, the demonstrated responsibility requirement is 

contained in paragraph (2)(B). However, this lack of clarity in the statute need not

detain us in this case. Our Glover decision has already held that the demonstrated 

responsibility requirement is incorporated as a prerequisite to pursuit of the private 

cause of action. See Glover, 459 F.3d at 1308–09 (holding that a plaintiff pursuing 

the private cause of action must satisfy the demonstrated responsibility 

requirement). The Glover court explained that the demonstrated responsibility 

requirement was incorporated as a prerequisite because the private cause of action 

language references paragraph (2)(A), which in turn references paragraph (2)(B). 

See also Humana, __ F.3d __, 2016 WL 4169120, at *6 (“Although paragraph 

(2)(A) does not expressly obligate primary plans to make payments, the defined 

term ‘primary plan’ presupposes an existing obligation (whether by statute or 

contract) to pay for covered items or services. Therefore, a primary plan ‘fails to 

Case: 15-14353 Date Filed: 08/30/2016 Page: 15 of 25 
16

provide for primary payment (or appropriate reimbursement) in accordance with 

paragraph[] . . . (2)(A),’ when it fails to honor the underlying statutory or 

contractual obligation.”) (internal citation omitted).

We turn, then, to answer the question: Have Plaintiffs adequately 

demonstrated Defendants’ responsibility for payment by alleging an obligation 

pursuant to the insurance contracts, or must Plaintiffs first obtain a judgment 

against Defendants by suing for enforcement of those contracts prior to bringing 

suit under the MSP Act?

2. Application of the Demonstrated Responsibility Provision

The MSP Act permits demonstration of a primary plan’s responsibility to 

pay “by a judgment, a payment conditioned upon the recipient’s compromise, 

waiver, or release (whether or not there is a determination or admission of liability) 

of payment for items or services included in a claim against the primary plan or the 

primary plan’s insured, or by other means.” 42 U.S.C. § 1395y(b)(2)(B)(ii). The 

question before us is whether the phrase “by other means” permits demonstration 

of responsibility by a contractual obligation. Defendants argue that it does not; they 

urge us to hold that Glover’s demand for a “separate adjudication or agreement” 

applies when the defendant’s responsibility derives from contract as well as from 

tort. Plaintiffs argue that a contractual obligation is among the “other means” by 

Case: 15-14353 Date Filed: 08/30/2016 Page: 16 of 25 
17

which the statute permits demonstration of responsibility, and that no separate 

adjudication or agreement (in addition to the contract) is necessary.

This issue has been addressed in regulations issued by the Centers for 

Medicare and Medicaid Services (“CMS”) interpreting the MSP Act. The 

implementing regulations specify that a primary payer must reimburse Medicare 

“for any payment if it is demonstrated that the primary payer has or had a 

responsibility to make payment.” 42 C.F.R. § 411.22(a). The regulations explicitly 

list the means by which responsibility for payment may be demonstrated, including 

a judgment or “other means, including but not limited to a settlement, award, or 

contractual obligation.” Id. § 411.22(b).5 The regulations thus specifically permit 

demonstration of responsibility by means of a contractual obligation.

“Generally, considerable weight should be accorded to an executive 

department’s construction of a statutory scheme it is entrusted to administer . . . .”

 

5 That subsection of the regulations reads, in its entirety:

(b) A primary payer's responsibility for payment may be demonstrated by—

(1) A judgment;

(2) A payment conditioned upon the beneficiary’s compromise, waiver, or 

release (whether or not there is a determination or admission of liability) 

of payment for items or services included in a claim against the primary 

payer or the primary payer's insured; or

(3) By other means, including but not limited to a settlement, award, or 

contractual obligation.

42 C.F.R. § 411.22(b).

Case: 15-14353 Date Filed: 08/30/2016 Page: 17 of 25 
18

Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 844, 104 S. Ct. 

2778, 2782, 81 L. Ed. 2d 694 (1984). If a statute is silent or ambiguous with 

respect to a certain issue, we proceed to ask whether the executive’s construction 

of the statute is permissible. Gulfcoast Med. Supply, Inc. v. Sec’y, Dep’t of Health 

& Human Servs., 468 F.3d 1347, 1351 (11th Cir. 2006) (citing Chevron, 467 U.S. 

at 842–44, 104 S. Ct. at 2781–82). Here, the statutory phrase “other means” is 

ambiguous: it is not apparent from the text of the statute alone which “other 

means” Congress intended to allow. And a contractual obligation seems to us to be 

an eminently reasonable method of demonstrating responsibility.

Defendants do not claim that the interpretation of the statute provided in the 

regulations is unreasonable. Instead, they fall back on their primary argument: that 

the existence of a contract does not necessarily demonstrate responsibility. They 

point out that PIP insurance contracts do not promise payment or reimbursement 

for all medical expenses, and they argue that it is possible that Plaintiffs seek to 

recover for injuries not covered under their policies. In other words, Defendants 

argue that a contract can demonstrate responsibility, but only once it is reduced to a 

judgment or settlement.

We disagree, and our disagreement underscores an important difference 

between tort liability and contractual obligations. It is a fundamental principle of 

Case: 15-14353 Date Filed: 08/30/2016 Page: 18 of 25 
19

contract law that a contract imposes enforceable rights and obligations: “The heart 

of ‘contract’ is thus found both in its promissory nature and in its 

enforceability. . . . [O]nce a contract is entered, the parties’ rights and obligations 

are binding under the law . . . .” 1 Williston on Contracts § 1:1 (4th ed.). A contract 

imposes obligations on the parties immediately, without any involvement of the 

courts. While a lawsuit may be necessary to enforce a contract in the event of a 

breach, the obligations created by the contract exist as soon as it is executed. By 

contrast, an alleged tortfeasor has no obligations until he is adjudged liable. In a 

similar vein, demonstrating responsibility by means of a “judgment” necessarily 

presupposes a separate proceeding in which that judgment was obtained. On the 

other hand, the term “contractual obligation” in the CMS regulations presupposes

only the existence of a contract.

Moreover, adopting Defendants’ interpretation would render meaningless

the statutory phrase “by other means,” as well as the specific reference to 

contractual obligations in the regulation. Defendants’ reading of the law “is thus at 

odds with one of the most basic interpretive canons, that a statute should be 

construed so that effect is given to all its provisions, so that no part will be 

inoperative or superfluous, void or insignificant.” Corley v. United States, 556 U.S. 

303, 314, 129 S. Ct. 1558, 1566, 173 L. Ed. 2d 443 (2009) (internal quotation 

Case: 15-14353 Date Filed: 08/30/2016 Page: 19 of 25 
20

marks and brackets omitted). If Defendants are correct that a judgment or 

settlement agreement is always a prerequisite to suit under the MSP Act, then there 

are no “other means” that may demonstrate responsibility, and that part of the 

statute is superfluous. Additionally, Defendants’ preferred interpretation renders 

the reference in the regulations to contractual obligations entirely inoperative. If 

Defendants are correct that a contract must always be reduced to a judgment, then 

a “contractual obligation” can never demonstrate responsibility; only a judgment 

can. The regulations envision demonstrating responsibility with a judgment or 

settlement from a separate proceeding. If a contractual obligation, absent such a 

judgment or settlement, cannot demonstrate responsibility to pay, then the 

reference to judgments and settlements would be sufficient. There is no purpose at 

all for listing a contractual obligation as a means of demonstrating responsibility.

Requiring that such a contractual obligation be reduced to a judgment renders 

superfluous the phrase “by other means.”

This line of reasoning is entirely consistent with Glover. In Glover, we 

concluded that responsibility must be demonstrated by “a separate adjudication or 

agreement.” 459 F.3d at 1309. An insurance contract is, of course, a separate 

agreement, and permitting demonstration of responsibility via a contractual 

obligation is therefore consistent with our holding in Glover. Glover was decided 

Case: 15-14353 Date Filed: 08/30/2016 Page: 20 of 25 
21

in the tort context, and the “agreement” the Glover panel likely had in mind was a 

settlement agreement. But a settlement agreement is just a type of contract. So if 

Defendants are correct that a contractual obligation alone cannot demonstrate 

responsibility, then, presumably, even the beneficiary of a settlement agreement 

has not demonstrated responsibility until he has sued for breach of the settlement 

agreement, prevailed, and obtained a judgment. Given the explicit references in the 

text of the law to settlements and waivers as means of demonstrating 

responsibility, Congress clearly did not intend the result Defendants request. The 

plain language of the MSP Act indicates that at least some contractual 

obligations—namely, settlement agreements—are sufficient to demonstrate 

responsibility. We see no reason that other types of agreements—such as insurance 

contracts—should be treated differently.

We hold that a contractual obligation may serve as sufficient demonstration 

of responsibility for payment to satisfy the condition precedent to suit under the 

MSP Act. This does not relieve Plaintiffs of their burden to allege in their

complaints, and then subsequently prove with evidence, that Defendants’ valid 

insurance contracts actually render Defendants responsible for primary payment of 

the expenses Plaintiffs seek to recover. And Defendants may still assert any valid

contract defense in arguing against their liability. We hold only that a contractual 

Case: 15-14353 Date Filed: 08/30/2016 Page: 21 of 25 
22

obligation may satisfy the demonstrated responsibility requirement, not that the 

existence of a contractual obligation conclusively demonstrates liability under the 

MSP Act’s private cause of action.

3. Policy Maximums

Defendants IDS and Infinity Auto Insurance Company (“Infinity”) argue in 

the alternative that, even if Plaintiffs’ insurance contracts are sufficient to 

demonstrate Defendants’ responsibility to pay, Plaintiffs’ claims still fail because 

their complaints show that Defendants no longer have a responsibility to pay.

Defendants’ argument is grounded in the fact that Plaintiffs’ insurance policies 

provided for a maximum of $10,000 in benefits. Defendants claim that any 

responsibility they had to pay was exhausted once the policy maximums were

reached, which may have occurred in some of these cases. Plaintiffs respond that 

the statute requires repayment whenever a primary plan “has or had a 

responsibility to make payment,” 42 U.S.C. § 1395y(b)(2)(B)(ii) (emphasis added), 

and that Defendants are therefore liable if they ever had a responsibility to make a 

payment, even if they subsequently paid out the maximum benefits available under 

the policies.

6

 

6 In their brief, Plaintiffs do concede that they cannot recover more than twice the policy limits.

Case: 15-14353 Date Filed: 08/30/2016 Page: 22 of 25 
23

The district courts to which these arguments were presented did not reach 

them, instead dismissing the cases solely on the grounds that Glover barred 

liability. On remand, we leave it to the district courts to decide this issue in the first 

instance.7

C. Remand of State Law Claims

In one of the consolidated cases, MSP Recovery, LLC v. Allstate Insurance 

Company, No. 15-14790, the district court remanded Plaintiff MSP Recovery’s 

supplemental state law claims after dismissing the MSP Act claim, which was the

only federal claim in the case. MSP Recovery asks that, if we vacate the dismissal 

of its MSP Act claim, we reinstate its state law claims. Defendant Allstate 

Insurance Company agrees that that is the proper course of action.

An order remanding a case for lack of subject-matter jurisdiction is not 

reviewable on appeal. 28 U.S.C. § 1447(d). However, when a district court 

remands state law claims after declining to exercise supplemental jurisdiction, the 

remand order is not based on a lack of subject-matter jurisdiction. Carlsbad Tech., 

Inc. v. HIF Bio, Inc., 556 U.S. 635, 641, 129 S. Ct. 1862, 1867, 173 L. Ed. 2d 843 

(2009). Thus, the remand order in this case is appealable. Additionally, where there 

is a basis for federal jurisdiction, the district court must exercise its supplemental 

 

7 IDS has also moved for sanctions on the grounds that some of these appeals are frivolous 

because IDS has paid out the policy maximums. IDS’s motion is denied.

Case: 15-14353 Date Filed: 08/30/2016 Page: 23 of 25 
24

jurisdiction over related state law claims unless a statutory exception applies. See

Palmer v. Hosp. Auth. of Randolph Cty., 22 F.3d 1559, 1569 (11th Cir. 1994). 

Accordingly, once Plaintiff’s MSP Act claim is reinstated, the district court is 

required to exercise its supplemental jurisdiction over the related state law claims.

Because the dismissal of the MSP Act claim—a claim over which the district court 

had federal question jurisdiction—was in error, remand of the supplemental state 

law claims was also in error. We therefore vacate the district court’s remand order 

as well as the order of dismissal.

For the same reasons, we vacate the implicit discretionary dismissals of the 

state law claims in three of the other consolidated cases: MSP Recovery v. Allstate 

Insurance Company, No. 15-14353; MSPA Claims 1, LLC v. IDS Property 

Casualty Insurance, No. 15-14355; and MSPA Claims 1, LLC v. Infinity Auto 

Insurance Company, No. 15-14356. See Snow ex rel. Snow v. City of Citronelle, 

420 F.3d 1262, 1271 (11th Cir. 2005) (“Because we reinstate Snow’s federal 

claims, we must vacate the discretionary dismissal of the state-law claims, but we 

express no opinion on the merits of those claims.”).

III. CONCLUSION

For the reasons discussed above, we hold that a plaintiff suing a primary 

plan under the private cause of action in the MSP Act may satisfy the demonstrated 

Case: 15-14353 Date Filed: 08/30/2016 Page: 24 of 25 
25

responsibility prerequisite by alleging the existence of a contractual obligation to 

pay. A judgment or settlement from a separate proceeding is not necessary. The 

judgments of the district courts in these cases are vacated, and the cases are 

remanded for further proceedings not inconsistent with this opinion.

VACATED and REMANDED.

Case: 15-14353 Date Filed: 08/30/2016 Page: 25 of 25