Oxford Health Plans LLC v. Sutter

24 Fla. L. Weekly Fed. S 247, 186 L. Ed. 2d 113, 133 S. Ct. 2064, 569 U.S. 564, 81 U.S.L.W. 4382, 2013 WL 2459522, 2013 U.S. LEXIS 4358
CourtSupreme Court of the United States
DecidedJune 10, 2013
DocketNo. 12–135.
StatusPublished
Cited by1 cases

This text of 24 Fla. L. Weekly Fed. S 247 (Oxford Health Plans LLC v. Sutter) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Oxford Health Plans LLC v. Sutter, 24 Fla. L. Weekly Fed. S 247, 186 L. Ed. 2d 113, 133 S. Ct. 2064, 569 U.S. 564, 81 U.S.L.W. 4382, 2013 WL 2459522, 2013 U.S. LEXIS 4358 (U.S. 2013).

Opinion

Justice KAGAN delivered the opinion of the Court.

Class arbitration is a matter of consent: An arbitrator may employ class procedures only if the parties have authorized them. See *566Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662, 684, 130 S.Ct. 1758, 176 L.Ed.2d 605 (2010). In this case, an arbitrator found that the parties' contract provided for class arbitration. The question presented is whether in doing so he "exceeded [his] powers" under § 10(a)(4) of the Federal Arbitration Act (FAA or Act), 9 U.S.C. § 1 et seq. We conclude that the arbitrator's decision survives the limited judicial review § 10(a)(4) allows. *2067I

Respondent John Sutter, a pediatrician, entered into a contract with petitioner Oxford Health Plans, a health insurance company. Sutter agreed to provide medical care to members of Oxford's network, and Oxford agreed to pay for those services at prescribed rates. Several years later, Sutter filed suit against Oxford in New Jersey Superior Court on behalf of himself and a proposed class of other New Jersey physicians under contract with Oxford. The complaint alleged that Oxford had failed to make full and prompt payment to the doctors, in violation of their agreements and various state laws.

Oxford moved to compel arbitration of Sutter's claims, relying on the following clause in their contract:

"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. 15-16.

The state court granted Oxford's motion, thus referring the suit to arbitration.

The parties agreed that the arbitrator should decide whether their contract authorized class arbitration, and he determined that it did. Noting that the question turned on "construction of the parties' agreement," the arbitrator focused on the text of the arbitration clause quoted above. Id., at 30. He reasoned that the clause sent to arbitration *567"the same universal class of disputes" that it barred the parties from bringing "as civil actions" in court: The "intent of the clause" was "to vest in the arbitration process everything that is prohibited from the court process." Id., at 31. And a class action, the arbitrator continued, "is plainly one of the possible forms of civil action that could be brought in a court" absent the agreement. Ibid. Accordingly, he concluded that "on its face, the arbitration clause ... expresses the parties' intent that class arbitration can be maintained." Id., at 32.

Oxford filed a motion in federal court to vacate the arbitrator's decision on the ground that he had "exceeded [his] powers" under § 10(a)(4) of the FAA. The District Court denied the motion, and the Court of Appeals for the Third Circuit affirmed. See 05-CV-2198, 2005 WL 6795061 (D.N.J., Oct. 31, 2005), aff'd, 227 Fed.Appx. 135 (2007).

While the arbitration proceeded, this Court held in Stolt-Nielsen that "a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so." 559 U.S., at 684, 130 S.Ct. 1758. The parties in Stolt-Nielsen had stipulated that they had never reached an agreement on class arbitration. Relying on § 10(a)(4), we vacated the arbitrators' decision approving class proceedings because, in the absence of such an agreement, the arbitrators had "simply ... imposed [their] own view of sound policy." Id., at 672, 130 S.Ct. 1758.

Oxford immediately asked the arbitrator to reconsider his decision on class arbitration in light of Stolt-Nielsen . The arbitrator issued a new opinion holding that Stolt-Nielsen had no effect on the case because this agreement authorized class arbitration. Unlike in Stolt-Nielsen, the arbitrator explained, the parties here disputed the meaning of their contract; he had therefore been required "to construe the arbitration clause in the ordinary way to glean the parties' intent." App. 72. And in performing that task, the arbitrator continued, he had "found that the arbitration clause *568unambiguously evinced an intention to allow class arbitration." Id., at 70. The arbitrator concluded by reconfirming *2068his reasons for so construing the clause.

Oxford then returned to federal court, renewing its effort to vacate the arbitrator's decision under § 10(a)(4). Once again, the District Court denied the motion, and the Third Circuit affirmed.

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24 Fla. L. Weekly Fed. S 247, 186 L. Ed. 2d 113, 133 S. Ct. 2064, 569 U.S. 564, 81 U.S.L.W. 4382, 2013 WL 2459522, 2013 U.S. LEXIS 4358, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oxford-health-plans-llc-v-sutter-scotus-2013.