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.
This is an illustrative case as to why attorneys want to take precautions when producing discovery. The case is Inhalation Plastics, Inc. v. Medex Cardio-Pulmonary, Inc., No. 2:07-CV-116, 2012 WL 3731483 /0S.D. Ohio Aug. 28, 2012).
In this case, the court held that privilege had been waived as to 347 pages of inadvertently produced emails where, among other things, Defendant failed to establish the reasonableness of the precautions taken to prevent the disclosure and “failed to take adequate measures to rectify or mitigate the damage of the disclosure.”
Here, Defendant did not stamp any documents as confidential. Upon reviewing the documents at issue, the court held that those documents were covered under the attorney-client privilege. However, the court found that the privilege had been waived. The court highlighted the following facts:
- Defendant’s lack of specificity as to who conducted the review and how the review was conducted. The general assertion that multiple lawyers reviewed it was not enough.
- Defendant failed to produce a privilege log during discovery;
- 4.6% of the documents were inadvertently produced, which the Court found to be “relatively high.”
In sum, the Court opined:
After balancing the required factors, the Court concludes that Medex waived the attorney client privilege otherwise applicable to the 347 documents in the May 30 production. To summarize, the Court finds that Medex did not take reasonable precautions to protect its privileged information, the number of documents disclosed is significant, no privilege log was provided at the time of disclosure, the contents of some of the documents may be relevant to the heart of the dispute, and Medex made insufficient attempts to mitigate its damage even after it learned of the disclosure.
via Inadvertent Production Results in Waiver of Attorney-Client Privilege as to 347 Pages of Emails : Electronic Discovery Law.
On March 20th, the Supreme Court issued it’s opinion in Coleman v. Md. Ct. App., holding that Congress lacked the power to abrogate state immunity from suits for damages for violations of the FMLA’s self-care provisions.
The FMLA creates a private right of action for equitable relief and damages “against any employer (including a public agency) in any Federal or State court.” 29 USC 2617(a)(2). The FMLA states that an employee is entitled up to 12 weeks of unpaid leave per year for:
- [“family-care provisions” (A), (B), and (C)] (A) the care of a newborn son or daughter; (B) the adoption or foster-care placement of a child; (C) the care of a spouse, son, daughter, or parent with a serious medical condition; and
- [“self-care provision” (D)] (D) the employee’s own serious health condition when the condition interfere with the employee’s ability to perform at work.
The Coleman case deals with (D), dubbed the “self-care provision” by the Supreme Court. The Supreme Court, written by Justice Kennedy, ruled that the waiver of States’ immunity was not present at the self-care provision because the legislature was not concerned with sex-based discrimination with respect to the self-care provision; unlike in the family-care provisions. See, e.g., Nevada Dep’t of Human Resources v. Hibbs, 538 US 721 (2003) (upholding waiver of States’ immunity with respect to the family-care provision (C) because States had family-leave policies that differentiated on the basis of sex).
The Supreme Court relied on amicus curiae brief citing to the BLS which showed that when the FMLA was enacted, 95% of full-time state and local employees were covered by paid sick leave plans and 96% of such employees enjoyed short-term disability protection. The Supreme Court concluded based on the record that men and women were out on medical leave approximately equally. Citing H.R. Rep. No. 101-28, pt. 1, p. 15 (1989). Further, the legislative history revealed a concern for economic burdens and not sex discrimination. Citing S.R. Rep. No. 103-3, pp. 11-12 (1993); H.R. Rep. No. 101-28, p. 23 (1989). Consequently, the Supreme Court dismissed the case on the grounds that the self-care provision was not directed at an identified pattern of gender-based discrimination and was not congruent and proportional to any pattern of sex-based discrimination.
The Supreme Court also shot down the argument that the self-care provision is a necessary adjunct to the family-care provisions. Justice Kennedy highlighted that Congress made no findings or received any testimony that suggested that the availability of self-care leave equalized the expected amount of FMLA leave men and women will take. Justice Kennedy pointed that there was no evidence that women took more leave than men, or that employers assumed that women would take more leave time than men.
Lastly, the Supreme Court rejected petitioner’s argument regarding the disparate impact effect the leave restrictions would have on women. The Supreme Court noted that the provision must be directed at a pattern of constitutional violations.
Franken Debuts Consumer Rights Bill
WASHINGTON – Responding to a recent Supreme Court decision, DFL Sen. Al Franken today unveiled a bill to allow consumers to sue companies, even when they had already waived that right by signing a boilerplate contract.