[Dis-res] WLO-DR (Apr. 21-25, 2003)

[James A Papachristopoulos]

Willamette Law Online - Dispute Resolution
Willamette University, College of Law
Center for Dispute Resolution
April 21-25, 2003

---------------

**PLEASE NOTE:  DUE TO FINAL EXAMS, THIS EDITION CONTAINS REDUCED CONTENT**

THIS WEEK:

1.  Arbitration: RICO claims may be compelled to arbitration.

---------------

CASE SUMMARY:

Arbitration: RICO claims may be compelled to arbitration
Pacificare Health Systems, INC., et al. v. Brook et al; 2003 WL 1791225
(U.S. Supreme Court 2003)

Jeffrey Brook is a member of a group of physicians who filed suit against
PacifiCare Operations Inc. (PacifiCare) and other health management
organizations. Brook alleged that PacifiCare unlawfully failed to
reimburse him for health-care services that they had provided to patients
covered by PacifiCare’s healthplans, and brought the action under RICO,
ERISA, other federal and state prompt-pay statutes, as well as on theories
of breach of contract and unjust enrichment. PacifiCare moved to compel
arbitration, arguing that a contract provision called for the arbitration
of disputes, including those involving RICO. Brooke argued that the
arbitration provision prevented punitive damages and could not obtain
meaningful relief in arbitration for their claims under RICO. The district
court denied the request to compel the arbitration of the RICO claims
because of the remedial limitations in the relevant contract. The district
court also stated that it “faced a Paladino situation”, because Brooke
might not be able to obtain meaningful relief for allegations of statutory
violations. The Eleventh Circuit court affirmed the lower court’s
decision. On appeal PacifiCare argued whether remedial limitations render
an arbitration agreement unenforceable is not a question of
“arbitrability.” And hence should have been decided by the arbitrator.
PacifiCare also argued, that if remedial limitations was an issue of
arbitrability, and is therefore properly with in the purview of the courts
at the time, then this issue does not require invalidation of the
arbitration agreement. The Supreme Court held that the issues in this case
were not yet ripe to decide, and that, until the arbitrator interpets the
agreement and its terms like “punitive,” it would premature to decide this
issue based on the prior case law.  (DH)

Available online at:
http://caselaw.lp.findlaw.com/cgi-bin/getcase.pl?court=US&navby=case&vol=000&invol=02-215

---------------

Thank you for supporting WLO-DR.  If you wish to tell a friend about our
service, or remove yourself from our mailing list, please do so at the
following link:  http://www.willamette.edu/wucl/wlo/dis-res/

---------------

Editor-in-Chief:  Demetri Papachristopoulos
Writers:          David Hannon, Michael Greene, Kyle Abraham
Faculty Advisor:  Richard Birke

---------------