Oxford Health Plans LLC v. Sutter

John Sutter (plaintiff) entered into an agreement with Oxford Health Plans (defendant), a health-insurance carrier, pursuant to which Sutter agreed to provide medical care to members of Oxford’s network in exchange for compensation. The agreement also included a general arbitration clause, which stated, in part, “No civil action concerning any dispute arising under this Agreement shall be instituted before any court.” Later, Sutter sued Oxford on behalf of himself and a proposed class of physicians also under agreement with Oxford, alleging breach of contract. Oxford moved to compel arbitration of Sutter’s claim pursuant to the arbitration clause in their agreement. The court granted Oxford’s motion, and the parties thereafter agreed that the arbitrator should determine whether the agreement authorized class-wide arbitration. The arbitrator found that the arbitration clause was so general that it encompassed any conceivable court action, including class actions. The arbitrator certified the class, and Oxford moved to vacate that decision in district court, arguing the arbitration clause did not encompass class actions and that the arbitrator exceeded his authority under § 10(a)(4) of the Federal Arbitration Act (FAA). The district court denied the motion, and class-wide arbitration proceeded. In the meantime, the U.S. Supreme Court decided Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010), which held that an arbitrator exceeded his authority by allowing class arbitration when the parties had no agreement on the issue. Oxford requested that the arbitrator reconsider his decision in light of Stolt-Nielsen, then moved in district court to vacate the arbitrator’s decision. Both the request and motion were unsuccessful. The Court of Appeals for the Third Circuit affirmed.