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98 Iowa L. Rev. 1763 (2012-2013)
Healthcare Liens and the Common Fund Doctrine: The Need for Legislative Action to Prevent Fee Shifting at the Expense of Healthcare Providers

handle is hein.journals/ilr98 and id is 1819 raw text is: Healthcare Liens and the Common Fund Doctrine: The Need for Legislative Action to Prevent Fee Shifting at the Expense of Healthcare Providers Alex W Schulte* ABSTRACT: Over the course of the last forty years, state appellate courts have grappled with the issue of whether the equitable common fund doctrine should be applied to a healthcare provider's statutory lien on the proceeds of a cause of action held by its patient. Early precedents in this area uniformly rejected this application of the common fund doctrine, but some recent cases have found it applicable and used it to impose liability on the healthcare provider for a share of a patient's attorney fees. This Note argues that the most prudent course of action--particularly in the many states without any established case law on this issue-is for state legislatures to amend state healthcare lien statutes to explicitly state their position on this shift in attorney fees. This Note further argues that this legislative action should reject any liability on the part of the healthcare provider for patient legal fees in order to preserve the full benefit of healthcare liens to those providers. I. INTRODU CTIO N .................................................................................... 1765 II. BACKGRO U ND ...................................................................................... 1767 A. THE HEAL THCARELiEN ................................................................. 1767 B. THE COMMON TADDOCT N ...................................................... 1770 C. THE COMMON F D DOCTRINE APPLIED TO HEALTHCARE LIENS ..... 1771 III. THE SPLIT AMONG STATE APPELLATE COURTS ................................... 1772 A. THEEARLYERA: -971-1992 ........................................................ 1773 i. The Implied-Contract Argument ........................................ 1773 2. The Subrogation Argum ent ................................................ 1775 * J.D. Candidate, The University of Iowa College of Law, 2013; B.S., The University of Missouri, 2010. I would like to thank Bill Rasmussen and Judge Rodney Clark for introducing me to this topic and for giving me my first chance to see what real lawyers do. I would also like to thank my parents, Bill and Candy Schulte, for all their support. 1763