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ADR in a wrongful-death suit, the Colorado Supreme Court held on June 9 that a wife is not bound by the arbitration provision contained in her deceased husband’s agreement with his health maintenance organization. Allen v. Pacheco, No. 01SC744. An arbitration clause in a contract between Kaiser Foundation Health Plan of Colorado and Karen Pacheco’s late husband required medical-malpractice claims-including claims for death asserted by a “member’s heir or personal representative”-to be submitted to arbitration. After her husband died from pancreatitis, Pacheco filed a wrongful-death action against his health care providers. When the trial court sent the case to arbitration after finding that the clause applied to the wife, the providers prevailed. A state appellate court reversed, stating in part that the agreement did not apply to nonparty spouses seeking wrongful-death claims. Affirming on different grounds, the Supreme Court said that the wife was not bound by the clause because it did not have the language and bold-faced type notice that the Colorado Health Care Availability Act requires for medical services agreements. Although the state act would normally be pre-empted by the Federal Arbitration Act, the McCarran-Ferguson Act exempts pre-emption of the applicable portions of the Colorado law because they were enacted “for the purpose of regulating the business of insurance” in that they regulate the relationship between a health insurer and its policyholders and protects the latter’s interests by ensuring adequate notice of arbitration agreements.

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