Bjc Health Sys. v. Group Health Plan
| Decision Date | 26 September 2000 |
| Docket Number | No. ED77705,ED77705 |
| Parties | GROUP HEALTH PLAN, INC. and HEALTHCARE USA, OF MISSOURI, Respondents, v. BJC HEALTH SYSTEMS, INC., Appellant |
| Court | Missouri Court of Appeals |
For Respondent: ALAN E. POPKIN, Attorney, ST. LOUIS, MO.
For Appellant: THOMAS C. WALSH, Attorney, ST. LOUIS, MO.
Appellant BJC Health Systems, Inc. appeals from a final judgment and permanent injunction entered by the Circuit Court of St. Louis County enjoining Appellant from receiving documents ordered to be produced to it by an arbitrator in an arbitration pending between Appellant and Respondents, Group Health Plan, Inc. and Healthcare USA, of Missouri. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
On March 12, 1997, Appellant and Respondents entered into a Global Capitation Agreement (the "GC Agreement"). Under the GC Agreement, Appellant and its affiliated hospitals were to provide health care services to persons enrolled in health care plans sponsored by Respondents.
Pursuant to Section 8 of the GC Agreement, Appellant and Respondents agreed to submit any disputes between them to arbitration. Section 8 of the GC Agreement further provided that "the arbitrators shall have no authority to award any punitive or exemplary damages, or to vary or ignore the terms of this Agreement, and shall be bound by controlling law."
Pursuant to Section 10.11 of the GC Agreement, Appellant and Respondents agreed that Missouri law would control their disputes. Specifically, Section 10.11 provides that "to the extent not preempted by Federal Law, this Agreement shall be governed by and construed in accordance with the laws of the State of Missouri and the United States of America."
On or about January 5, 2000, Appellant initiated an arbitration action against Respondents (the "Present Arbitration"). In the Present Arbitration, Appellant claims that Respondents breached various provisions of the GC Agreement. In response, Respondents filed their affirmative defenses and a counterclaim against Appellant.
The Unity Arbitration
In October, 1999, Respondents and Unity Health Network, LLC ("Unity") arbitrated a dispute. The Unity Arbitration concerned a Network Participation Agreement (the "NP Agreement") between Respondents and Unity. The NP Agreement has different substance and terms than the GC Agreement between Appellant and Respondents.
Due to the significant amount of highly confidential information exchanged during the course of the Unity Arbitration, Respondents and Unity entered into a Protective Order. The Protective Order was signed by the three-member arbitration panel. Respondents understood that the "proceedings of the [Unity] arbitration would remain confidential." Respondents agreed to produce their confidential records because the documents that were included in the discussion were related specifically to Respondents' relationship with Unity.
The Underlying Discovery Dispute
In the course of discovery in the Present Arbitration, on March 15, 2000, Appellant requested that the arbitrator issue a "Subpoena for Taking Deposition" directed to Unity. In its subpoena, Appellant requested that Mr. John Thomas, the General Counsel of Unity, provide testimony and produce a copy of the transcript and award from the Unity Arbitration, as well as a copy of any exhibits introduced at the hearing, including deposition transcripts or other discovery introduced as evidence in the Unity Arbitration.
In response, Respondents filed a Motion to Quash Appellant's subpoena. Thereafter, Ms. Elise Dunitz Brennan, the arbitrator, entered an order denying Respondents' Motion to Quash and issuing Appellant's subpoena. The order provided that any documents produced by Unity in response to Appellant's subpoena will be for "attorney-eyes-only."
Trial Court Proceedings
On March 31, 2000, Respondents filed a Verified Petition for Injunction and Motion for Temporary Restraining Order and Preliminary Injunction seeking to enjoin Appellant from obtaining any confidential records from the Unity Arbitration. In support of the request for injunctive relief, Respondents principally argued that the arbitrator exceeded her authority and disregarded Missouri law in issuing Appellant's subpoena because, under Section 435.014 RSMo, 1994, 1 all the records from the Unity Arbitration are "confidential" and "not subject to discovery."
The trial court granted a temporary restraining order in favor of Respondents and against Appellant. Thereafter, the court heard evidence and argument by counsel concerning this matter. Mrs. Davina Lane, Respondent GHP's CEO and President, testified concerning the highly confidential nature of the documents produced by Respondent during the Unity Arbitration, including specific provider contracts, fee schedules, as well as patient records. Mrs. Lane stressed that Respondents would suffer irreparable harm if Appellant was provided access to the confidential records from the Unity Arbitration, mainly because Appellant is a competing organization.
Finally, Mrs. Lane explained that the provision in the arbitrator's order that the documents would be marked for "attorney-eyes-only" did not give her much comfort:
My sense is that, though I understand that and firmly believe that all the attorneys involved have an ethical duty and would be careful not to divulge information, I think it is almost impossible for attorneys who represent large organizations such as [Appellant] to not pass on information in other settings. This is not the only area in which these attorneys will represent [Appellant]. It is impossible to think that information gleaned from these documents will not be passed in another context.
Appellant did not challenge or undermine Mrs. Lane's testimony concerning any of the above issues or call any witnesses during the preliminary injunction hearing.
On April 4, 2000, the trial court issued a Final Judgment granting a permanent injunction in favor of Respondents. This appeal follows.
MOTION TO DISMISS FOR MOOTNESS
As a threshold issue, we must first determine whether we have jurisdiction to hear this appeal. While the appeal was pending, Respondents filed a Motion to Dismiss Appeal on mootness grounds because the arbitrator in the present arbitration between the parties had already heard the case and had rendered a decision. Respondents argue that any decision by this court would have no practical effect on a presently existing dispute between Appellant and Respondents and the appeal should be dismissed.
"A cause of action is moot when the question presented for decision seeks a judgment upon some matter which, if the judgment was rendered, would not have any practical effect upon any then existing controversy." C.C. Dillon Co. v. City of Eureka, 12 S.W.3d 322, 325 (Mo. banc 2000) (citations omitted). When an event occurs which makes a decision on appeal unnecessary or which makes it impossible for this Court to grant effectual relief, the appeal is moot. Schulte v. Schulte, 949 S.W.2d 225, 226-27 (Mo.App. E.D. 1997). Missouri courts do not determine moot cases. Public Water Supply Dist. No. 5 of Jefferson County v. City of DeSoto, 8 S.W.3d 206, 208 (Mo.App. E.D. 1999). Therefore, if we determine that the issues presented are moot in light of the decision rendered by the arbitrator, we must dismiss.
The record reflects that the arbitrator already entered an award disposing of many of the arbitration issues. However, she denied a number of Appellant's claims for lack of evidence or lack of supporting documentation and has retained jurisdiction, with the parties' consent, to determine a number of outstanding issues. As such, her award is not final and could conceivably be affected by the materials Appellant seek to discover. A decision rendered by this Court would have a practical effect on an existing controversy between the parties. Therefore, the claims are not moot.
DISCUSSION
Appellant argues that the trial court erred in enjoining it from receiving the subpoenaed documents because the court was without jurisdiction to overrule a discovery ruling by an arbitrator in an ongoing arbitration. Appellant maintains that the trial court has no authority to intervene in an arbitration proceeding prior to award to review an interlocutory discovery determination by an arbitrator that is not in excess of the arbitrator's jurisdiction. The issue of the trial court's jurisdiction to interfere with the enforcement of an arbitrator's subpoena is one of first impression in Missouri.
Arbitration proceedings are favored and encouraged by the courts. Westridge Investment Group, L.P. v. McAtee, 968 S.W.2d 243, 245 (Mo.App. W.D. 1998). The purpose of arbitration is to provide a speedy, efficient, and less expensive alternative to court litigation. Id. As a general rule, courts should refrain from interfering with arbitration proceedings. See State ex rel. Telecom Management, Inc. v. O'Mally, 965 S.W.2d 215, 220 (Mo.App. W.D. 1998).
Missouri has adopted the Uniform Arbitration Act (UAA), which is fashioned after the Federal Arbitration Act (FAA). §§ 435.350-435.470; Westridge Investment Group, L.P. v. McAtee, 968 S.W.2d at 245; State ex rel. Telecom Management, Inc. v. O'Malley, 965 S.W.2d at 218. "The purpose of the UAA is to afford parties the opportunity to reach a final disposition of differences in an easier more expeditious manner than by litigation." Westridge Investment Group, L.P. v. McAtee, 968 S.W.2d at 245. Section 435.450 of the UAA provides that the Act shall be so construed as to effectuate the general purpose to make uniform the law of those states that enact it. Western Waterproofing Co., Inc. v. Lindenwood Colleges, 662 S.W.2d 288, 291 (Mo.App. E.D. 1983). Consequently, "opinions of the courts of other jurisdictions which have adopted the Act are shown greater than usual deference." Id., citing ...
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