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SCOTUS: Class Arbitration Upheld in Physician-Insurer Case

Margaret Dick Tocknell, for HealthLeaders Media, June 12, 2013

According to the Mayer-Brown post, a broader issue, which was not addressed in the Oxford complaint, was addressed in a footnote by the Court. "The Court commented that it 'would face a different issue' had Oxford Health Plans preserved the argument that the availability of class arbitration is a 'question of arbitratibility,' which is a gateway issue for courts, rather than arbitrators, to decide.

In writing the majority opinion, Justice Elena Kagan, wrote: "Nothing we say in this opinion should be taken to reflect any agreement with the arbitrator's contract interpretation, or any quarrel with Oxford's contrary reading. All we say is that convincing a court of an arbitrator's error—even his grave error—is not enough. So long as the arbitrator was 'arguably construing' the contract—which this one was—a court may not correct his mistakes. The potential for those mistakes is the price of agreeing to arbitration."

"As we have held before, we hold again: "It is the arbitrator's construction [of the contract] which was bargained for; and so far as the arbitrator's decision concerns construction of the contract, the courts have no business overruling him because their interpretation of the contract is different from his."

"In sum, Oxford chose arbitration, and it must now live with that choice. Oxford agreed with Sutter that an arbitrator should determine what their contract meant, including whether its terms approved class arbitration. The arbitrator did what the parties requested: He provided an interpretation of the contract resolving that disputed issue. His interpretation went against Oxford, maybe mistakenly so. But still, Oxford does not get to rerun the matter in a court."

Efforts to get comments from America's Health Insurance Plans, the industry's advocacy and lobbying group, were unsuccessful.


Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
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