Cert Granted In Arbitration Case

From: Dean Huffman (dean@thehuffpeople.net)
Thu Oct 17 21:36:12 2002


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CERTIORARI GRANTED

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Pacificare Health Sys. v. Book Certiorari Granted: 10/15/02

No. 02-215

Court below: 285 F.3d 971 (11th Cir. 2002)

Full Text: http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=11th&navby=case&no=0110247OPN

ARBITRATION (Application of Arbitration Clause to Nonsignatory Parties to a Contract)

This issue in this case is whether several Health Maintenance Organizations (HMOs) can compel nonsignatory plaintiff subscribers and physicians to arbitrate.

Subscribers and physicians brought suit against HMOs claiming violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), Employee Retirement Income Security Act (ERISA) and several other state and federal laws. Several doctors entered into contracts with varying HMOs, some contained arbitration clauses and others placed limitations on damages an arbitrator could award. The district court found that (1) arbitration clauses must be enforced between plaintiffs and defendants where both are signatory parties to the contract; (2) arbitration clauses excluding punitive damages were unenforceable because of RICO's treble damaged provision; (3) an HMO could not compel arbitration of an aiding and abetting charge where a doctor's contract is with a different HMO; (4) an HMO that is a nonsignatory party to the contract may not compel arbitration. The Court of Appeals for the Eleventh Circuit affirmed the district court's decision in its entirety. [Summarized by Jana Drajpuch].

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