In re Managed Care Litigation
| Decision Date | 26 April 2001 |
| Docket Number | No. MDL 1334.,No. 00-1334-MD.,MDL 1334.,00-1334-MD. |
| Citation | 143 F.Supp.2d 1371 |
| Parties | In re: MANAGED CARE LITIGATION. This Document Relates to Provider Track Cases. |
| Court | U.S. District Court — Southern District of Florida |
THIS MATTER came before the Court upon Defendants PacifiCare Health Systems, Inc. and PacifiCare Operations, Inc.'s ("PacifiCare's") Contingent Supplemental Motion to Compel Arbitration (D.E. No. 888), filed on January 26, 2001.
THE COURT has considered the motion, responses, and the pertinent portions of the record, and being otherwise fully advised in the premises, it is
ADJUDGED that the motion is GRANTED in part for the reasons addressed below. It is also
ADJUDGED that the Court's prior arbitration order ("Order") dated December 11, 2000 is MODIFIED with respect to Foundation's motion to compel arbitration for the reasons addressed below.
In its prior Order, the Court ruled that Dr. Breen's claims against PacifiCare that stem from Dr. Breen's affiliation with Sutter Health through Sutter Independent Physicians (the "Sutter Agreement (PacifiCare)") are to be arbitrated, except for Dr. Breen's RICO claims, as well as his aiding and abetting and conspiracy claims that stem from contractual relationships with other managed care companies. The RICO claims were deemed non-arbitrable because the Sutter Agreement (PacifiCare) prevented the arbitrator from awarding punitive (treble) damages. PacifiCare now has filed a "Contingent Supplement Motion to Compel Arbitration" based upon Dr. Breen's affiliation with Mercy Medical Foundation through Golden State Physicians (the "Mercy Agreement"), as well as for other reasons addressed in Part II.
Similar to the Sutter Agreement (PacifiCare), the Mercy Agreement contains an arbitration clause as the means for resolving disputes stemming from that agreement. (Mercy Agreement, § 6.2 ()). However, the Mercy Agreement's arbitration clause dos not prevent an arbitrator from awarding punitive damages. Thus, PacifiCare moves the Court to compel Dr. Breen to arbitrate all claims arising out of the Mercy Agreement.1
The Court now is presented with a situation where the litigants have entered into two different contracts that contain inconsistent arbitration agreements. The Court was faced with precisely the same scenario in its prior Order with respect to Dr. Kelly's claims against CIGNA, as well as a somewhat similar scenario concerning Dr. Breen and Foundation. After reviewing its prior Order, it appears that the Court did not resolve these two matters consistently. With CIGNA there was a Specialist Physician Agreement ("Specialist Agreement") and a Physician Managed Care Agreement ("Physician Agreement"). The Specialist Agreement mandated arbitration for the majority of Dr. Kelly's claims, while the Physician Agreement did not mandate arbitration. The Court ruled that Dr. Kelly's claims that stem from the Specialist Agreement shall be arbitrated, while his claims that stem from the Physician Agreement shall be litigated before the undersigned.
However, with Foundation and Dr. Breen the Court analyzed four agreements between the litigants: (1) Sutter Agreement between Health Net and Sutter Independent Physicians as a Participating Medical Group ("Sutter Agreement (Foundation)"), (2) Physicians Services Agreement between Health Net and Foundation Health Systems Affiliates and Dr. Breen ("Physicians Services Agreement"), (3) Champus/Tricare Prime and Extra Professional Provider Agreement between Foundation Health Systems Affiliates and Dr. Breen ("Champus/Tricare Agreement"), and (4) CHW Agreement between Foundation Health Systems Affiliates and CHW Medical Foundation as a Participating Medical Group ("CHW Agreement"). The Court expressed concern regarding the provision in the Sutter Agreement (Foundation) that required Dr. Breen to advance the arbitration fees as the initiating party, in view of the Eleventh Circuit's concern that steep filing fees and costs could prevent meaningful relief through arbitration. Randolph v. Green Tree Fin. Corp., 178 F.3d 1149 (11th Cir.1999) rev'd in part Green Tree Fin. Corp. v. Randolph, 531 U.S. 79, 121 S.Ct. 513, 148 L.Ed.2d 373 (2000). The Court found the arbitration clauses in the Physicians Services Agreement and the Champus/Tricare Agreement to be enforceable and compelled arbitration for all of Dr. Breen's claims, except for aiding and abetting and conspiracy claims that stem from contractual relationships with other managed care companies. The Court did not compel arbitration based upon the Sutter Agreement (Foundation), nor on the CHW Agreement that contained a provision prohibiting the arbitrator from awarding punitive damages and a six month statute of limitations to institute arbitration. But the Court did not, at that time, retain jurisdiction over Dr. Breen's claims that stemmed from the Sutter Agreement (Foundation) and CHW Agreement.
After review of its prior Order and the parties' pleadings concerning PacifiCare's present motion to compel, the Court finds that the approach taken with respect to Dr. Kelly's claims against CIGNA is the correct way to handle instances where the litigants have multiple agreements with inconsistent arbitration clauses. It is axiomatic that parties should only be compelled to arbitrate disputes that the parties have agreed to arbitrate. E.g., AT & T Tech. v. Communications Workers of Am., 475 U.S. 643, 648-49, 106 S.Ct. 1415, 89 L.Ed.2d 648 () (citation omitted); Morewitz v. West of England, 62 F.3d 1356, 1365 (11th Cir.1995) (); Goldberg v. Bear Stearns & Co., 912 F.2d 1418, 1419 (11th Cir.1990) ().
Accordingly, Dr. Breen's claims against...
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