10 June 2013

Law in Plain English: Oxford Health Plans LLC v. Sutter

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

Oxford Health Plans LLC v. Sutter

Dr. Sutter and Oxford Health Plans are parties to a Primary Care Physician Agreement. According to the agreement, disputes are to be handled by arbitration. Several years into the agreement, Sutter accused Oxfort of improperly denying, underpaying, and delaying reimbursement of physicians' claims for the provision of medical services. He filed a class action suit, but the New Jersey Superior Court granted Oxford's motion to compel arbitration. The arbitrator found that the agreement permitted class arbitration. The District Court and the Third Circuit agreed. The question before the Court was whether the arbitrator acts within his powers under the Federal Arbitration Act  or exceeds those powers by determining that parties affirmatively agreed to authorize class arbitration based solely on their use of broad contractual language precluding litigation and requiring arbitration of any dispute arising under their contract. In a unanimous decision, the Supreme Court ruled that the arbitrator’s decision survived the limited judicial review allowed by the FAA; and that he did not exceed his powers. As a result, Sutter's class action suit will not go forward and he must submit to arbitration. The practical impact of this decision is that the Supreme Court continues to give a wide amount of deference to arbitration and arbitrator's decisions.
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