On June 10, the U.S. Supreme Court issued its much-awaited decision in Oxford Health Plans v. Sutter,1 affirming lower court rulings that upheld an arbitrator’s decision to allow class arbitration proceedings rather than only an individual arbitration. However, the court did so on narrow grounds, chiefly because the parties had agreed that the arbitrator should decide whether their contract authorized class arbitration. Absent that stipulation, the court might have ruled differently. The court’s decision here was influenced by the extremely limited judicial review of arbitrators’ decisions allowed under the Federal Arbitration Act (FAA), as opposed to "gateways" issues such as "arbitrability" which judges decide.
John Sutter was a pediatrician providing medical services to insureds of Oxford Health Plans under a fee-for-services contract that called for binding arbitration of contractual disputes. He filed a putative class action lawsuit in a New Jersey state court claiming that Oxford failed to promptly and fully pay him and other physicians. Oxford successfully moved to compel arbitration. The arbitrator decided that the parties’ contractual intent was to allow class arbitration.
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