Tag Archives: interpretation

Sup. Ct. allows Class Action Arbitration under FAA

In Oxford Health Plans LLC v. Sutter, No. 12-125 (2013), the Supreme Court ruled that an arbitrator can require a class action arbitration.

The gist of the case is that Sutter, a pediatrician, had a fee-for-services contract, which required arbitration for all contractual disputes.  When Oxford failed to promptly pay him and other physicians, Sutter filed a class action in New Jersey.  After filing, the court compelled arbitration.  The arbitrator concluded that the contract called for class action arbitration.  Sutter appealed to higher courts, but these appeals were denied.

The Supreme Court explained its decision as follows.  First, the parties agreed to go to arbitration in their contract.  Second, an arbitrator looks at the contract, makes a decision based on the contractual language, and this decision is binding.  Thirdly, and most importantly, the Supreme Court explained that judicial review is limited to whether the arbitrator interpreted the contract, not whether the court agreed with the decision.  Consequently, because the arbitrator considered the contract, the arbitrator’s decision stands.  They only way to vacate an arbitral decision is when an arbitrator strayed from his task of interpreting the contract.  In other words, not when he performed his task poorly.

As a note: In prior decisions (Steelworkers Trilogy/Misco) in the labor context under the Labor Management Relations Act (LMRA), the Supreme Court had ruled that a contractual language had to explicitly allow class actions in the arbitration clause.  Here, the arbitration clause did not do so.

This raises the question of how the Federal Arbitration Act (FAA) reconciles with LMRA arbitrations when they are both present.  In this case, only the FAA was involved.

via Workplace Prof Blog: SCOTUS OKs Class Arbitration.

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Filed under Appellate, courts, employment, labor, legal decision, Supreme Court, union, waiver

Wal-Mart Class Action: class not narrowed

I bring to you this legal decision in a sex discrimination class action against Wal-Mart because it provides an example of a class that was not narrowed by the Court.  This is the Dukes case that went up to the Supreme Court to discuss the issue of commonality.  This decision can be found here.

In a 2001 federal complaint led by Betty Dukes, a putative class claimed that Wal-Mart Stores received paid women less and offered them fewer promotions than it offered men in comparable positions.

Though a San Francisco federal judge initially certified a class that would cover estimated 1.5 million women, making it the largest civil rights case in U.S. history, the Supreme Court disbanded that class in 2011 on the basis of lacking commonality. On remand, the plaintiffs filed a fourth amended complaint that seeks to certify a narrower class than that rejected by the high court.

The Bentonville, Ark.-based company responded with a motion to strike the class allegations. It claims that the statute of limitations bars the claims, and that the newly proposed class still fails to meet the commonality requirement.

Denying that motion, the Northern District of California set a deadline of Jan. 11, 2013, for the class-certification motion.  Undeterred, Wal-Mart sought leave to file an interim appeal with the 9th Circuit.

Wal-Mart argued that the Dukes Supreme Court decision should be interpreted as a total rejection of plaintiffs’ theories.  The District Court disagreed.  The District Court held that the Dukes Supreme Court decision rested on plaintiffs’ “inadequacy of their proof.”

The District Court explained:

The Supreme Court’s decision foreclosed claims that delegated discretion -alone- is sufficient to state a common question for purposes of Rule 23.  It does not follow that any time a plaintiff alleges that a company has a policy involving some amount of delegated discretion, the plaintiff is precluded from showing a classwide pattern or practice of discrimination or a common mode of exercising delegate discretion susceptible to classwide relief.  That is why the Supreme Court reached the question whether the plaintiffs had evidence on those points sufficient to establish a common question under Rule 23.

In his conclusion, Judge Breyer denied the interlocutory appeal “on the grounds that (1) immediate appeal would not, at this time, materially advance the ultimate termination of the litigation in light of the impending certification motion, and (2) no substantial grounds for difference of opinion exist regarding the commonality issue.”

via Courthouse News Service.

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Filed under Appellate, courts, employment, legal decision, Supreme Court, wage

Medicare: Not a “Fancy Two-Step” Process

A federal judge, Judge Rosemary Collyer, in the District of Columbia Court, ruled in the case Allina Health Servs. v. Sebelius, U.S. Dep’t of Health and Human Servs., 10-cv-1463 (RMC).

In his option, Judge Collyer rebuked the government for arbitrarily changing the Medicare reimbursement formula for hospitals serving low-income patients.

Generally, the DSH (Dep’t of Health and Human Services) calculates payments by using the Medicare Disproportionate Share Hospital Fraction. The basis of this lawsuit arose out of the interpretation of the program “Medicate + Choice.”  Judge Collyer found that by relying on the complex nature of the program, the government executed a “fancy two-step” process whereby the government did not engage in proper rulemaking or even an explanation of the benefits.

In the opinion, Judge Collyer stated:

“The secretary’s pretense in briefing the instant matter – that her current interpretation is entirely consistent with the past – is, as the court explains below, clearly forestalled by Northeast Hospital.”

“[P]atients enrolled in an M+C Plan should be counted in the Medicare fraction or the Medicaid fraction of the DSH patient percentage calculation.”

Consequently, Judge Collyer ruled:

“The court concludes that the secretary’s interpretation of the fractions in the DSH calculation, announced in 2004 and not added to the Code of Federal Regulations until the summer of 2007, was not a ‘logical outgrowth’ of the 2003 NPRM”…. “The rulemaking procedure was flawed due to both the single-minded way the NPRM presented the issue and the fact that the secretary adopted the polar opposite of the original proposal.  Contrary to the secretary’s argument, the comments do not remedy these deficiencies.”

 

via Courthouse News Service.

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