By Jonathan Stempel
Dec 7 (Reuters) - The U.S. Supreme Court on Friday agreed to
hear an appeal that gives the nine justices a chance to limit
the ability of consumers and businesses to litigate disputes as
a class.
At issue was whether doctors could collectively arbitrate a
dispute over payments with Oxford Health Plans LLC even though
the governing arbitration agreement did not mention class
actions.
The court has in recent years made it harder for some
parties to litigate or arbitrate their claims together, which
could boost payouts and lower costs.
In the 2010 case Stolt-Nielsen v. AnimalFeeds International
Corp, the court said it "cannot be presumed" that parties to a
dispute agreed to accept class arbitration simply by having
agreed to arbitrate in the first place.
And the next year, in AT&T Mobility v. Concepcion, the court
gave businesses a big victory by upholding contracts that
required customers to arbitrate disputes individually, and waive
their right to pursue class-action litigation.
In the Oxford case, an arbitrator allowed class arbitration
of a dispute over that company's alleged failure to properly
reimburse doctors including John Sutter, who challenged how some
16,500 physicians in New Jersey were reimbursed.
The arbitrator allowed class arbitration despite the silence
on that issue of the governing contractual clause, which said:
"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."
The 3rd U.S. Circuit Court of Appeals in Philadelphia upheld
the Oxford arbitrator's decision in April, saying the arbitrator
simply "construed the text of the arbitration agreement to
authorize and require class arbitration".
But Seth Waxman, a former U.S. solicitor general
representing Oxford, said this effectively gave arbitrators
unfettered discretion to decide whether there was an "implicit"
understanding between parties to allow class arbitration.
He said that while the federal appeals court in New York has
taken a similar approach, the federal appeals court in New
Orleans required more of a contractual or legal basis.
"A party's right not to be dragooned into class arbitration
proceedings that it never agreed to authorize should not depend
on which federal court is asked to enforce the ... basic precept
that arbitration is a matter of consent, not coercion," Waxman
wrote.
The doctors, while noting that the agreement was "atypical",
urged the Supreme Court not to take the case.
They said the appellate court split appeared based more on
the facts of the particular cases, and that the issue will
become less important as more parties use agreements with
explicit language about class arbitration.
A decision is expected by the end of June.
The case is Oxford Health Plans LLC v. Sutter, U.S. Supreme
Court, No. 12-135.
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