Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

John Ivan Sutter, M.D. v. Oxford Health Plans LLC

April 3, 2012

JOHN IVAN SUTTER, M.D.
v.
OXFORD HEALTH PLANS LLC, APPELLANT



On Appeal from the District Court for the District of New Jersey (No. 05-cv-2198) District Judge: Honorable Garrett E. Brown

The opinion of the court was delivered by: Fuentes, Circuit Judge:

PRECEDENTIAL

Argued November 17, 2011

Before: FUENTES, CHAGARES, Circuit Judges, and POGUE, Judge*fn1

OPINION OF THE COURT

Oxford Health Plans, LLC, and Dr. Ivan Sutter are parties to a Primary Care Physician Agreement, drafted by Oxford, which contains a broad arbitration clause. Neither the arbitration clause nor any other provision of the agreement makes express reference to class arbitration. Nevertheless, when a dispute arose regarding Oxford‟s alleged failure to make prompt and accurate reimbursement payments to participating physicians, an arbitrator construed the broad text of the clause to authorize class arbitration. Oxford contends that the Supreme Court‟s decision in Stolt- Nielsen S.A. v. AnimalFeeds International Corp., 130 S. Ct. 1758 (2010), requires vacatur of the award authorizing class arbitration. We disagree, and we will affirm the Order of the District Court denying Oxford‟s motion to vacate the award.

I

By their 1998 Primary Care Physician Agreement (the "Agreement"), the parties agreed that Sutter would provide primary care health services to members of Oxford‟s managed care network in exchange for compensation at predetermined reimbursement rates. They also agreed to arbitrate their disputes under the Agreement by a clause that states:

No civil action concerning any dispute arising under this Agreement shall be instituted before any court, and all such disputes shall be submitted to final and binding arbitration in New Jersey, pursuant to the Rules of the American Arbitration Association with one arbitrator. (App. 55).

A dispute arose in April 2002, when Sutter accused Oxford of engaging in a practice of improperly denying, underpaying, and delaying reimbursement of physicians‟ claims for the provision of medical services. Sutter filed a complaint on behalf of himself and a class of health care providers against Oxford and other health insurers in New Jersey Superior Court, alleging breach of contract and other violations of New Jersey law. Oxford moved to compel arbitration of Sutter‟s claims against it under the Agreement. Sutter opposed the motion, arguing that referral of the class claims to individual arbitration would violate New Jersey public policy. He urged the Superior Court either to refuse to enforce the clause or to certify the class before sending the claims to arbitration. In October 2002, the Superior Court granted Oxford‟s motion to compel arbitration and ordered that all procedural issues, including those of class certification, be resolved by the arbitrator.

The parties commenced arbitration before William L.D. Barrett and submitted to him the question of whether the arbitration clause in their Agreement allows for class arbitration. By memorandum and order dated September 23, 2003, he determined that it does. Framing the question as one of contract construction, the arbitrator turned first to the text of the arbitration clause. He described the clause as "much broader even than the usual broad arbitration clause;" it was "unique in [his] experience and seem[ed] to be drafted to be as broad as can be." (App. 47). The arbitrator thus determined that the clause‟s first phrase, "No civil action concerning any dispute arising under this Agreement shall be instituted before any court," embraces all conceivable court actions, including class actions. Because the clause‟s second phrase sends "all such disputes" to arbitration, he reasoned that class disputes must also be arbitrated. Thus, the arbitrator concluded that the clause expressed the parties‟ intent to authorize class arbitration "on its face." (App. 48).

He observed that an express carve-out for class arbitration would be required to negate this reading of the clause. He mused, however, that it would be bizarre for the parties to have intended to make class action impossible in any forum. Since he found the clause unambiguous, the arbitrator did not reach Sutter‟s argument that any ambiguity in the clause should be construed against its drafter, Oxford. The arbitrator subsequently incorporated this clause construction into his Partial Final Class Determination Award, dated March 24, 2005.

In April 2005, Oxford filed a motion to vacate the award in the District Court, arguing that the arbitrator had exceeded his powers and manifestly disregarded the law by ordering class arbitration. The District Court denied Oxford‟s motion in October 2005, and a panel of this Court affirmed in February 2007. Sutter v. Oxford Health Plans, LLC, No. 05- CV-2198, 2005 U.S. Dist. LEXIS 25792 (D.N.J. Oct. 31, 2005), aff'd 227 F. App‟x 135 (3d Cir. 2007). The arbitration thereafter proceeded on a classwide basis.

This action represents Oxford‟s second foray into federal court to vacate the award authorizing class arbitration as in excess of the arbitrator‟s powers. Since Oxford‟s first unsuccessful attempt at vacatur, the Supreme Court decided Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 130 S. Ct. 1758 (2010), in which it held that an arbitral panel had exceeded its authority by allowing class arbitration when the parties had reached no agreement on the issue. See id. at 1775. Oxford contends that Stolt-Nielsen controls this case and compels the conclusion that the arbitrator‟s construction of the clause was in excess of his powers. Oxford first moved the arbitrator for reconsideration of his clause construction award, but the arbitrator distinguished Stolt-Nielsen and reaffirmed his construction of the parties‟ clause. Oxford then moved the District Court to vacate the arbitrator‟s most recent award or, in the alternative, to reconsider its own 2005 decision ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.