Belnap v. Iasis Healthcare
2017 U.S. App. LEXIS 180
| 10th Cir. | 2017Background
- Dr. LeGrand Belnap (surgeon) entered a 2012 Management Services Agreement with Salt Lake Regional Medical Center (SLRMC) to develop a surgical "Center." The Agreement contained a broad dispute-resolution clause calling for mediation and, if necessary, JAMS-administered arbitration (JAMS Rules incorporated by reference).
- In March 2013 SLRMC’s Medical Executive Committee suspended Belnap’s privileges; a Fair Hearing Committee later found the suspension arbitrary and recommended it be vacated, and the Board vacated it. While suspended, SLRMC reported the suspension to the National Practitioner Data Bank and allegedly failed to fully retract/correct resulting harms.
- Belnap sued SLRMC, SLRMC’s alleged parent (Iasis), several individual SLRMC employees and others asserting seven claims (antitrust conspiracy; breach of contract/Bylaws; breach of implied covenant; defamation; intentional infliction of emotional distress; injunctive relief; declaratory relief re: HCQIA immunity).
- Defendants moved to stay and compel mediation/arbitration under the Agreement. The district court found the arbitration clause broad but performed a preliminary scope analysis, compelling arbitration only of the antitrust claim as to SLRMC and denying arbitration as to most other claims and all claims against nonsignatories.
- On appeal the Tenth Circuit held the Agreement’s incorporation of the JAMS Rules was "clear and unmistakable" evidence delegating arbitrability to the arbitrator. The Tenth Circuit therefore reversed the district court insofar as it declined to compel arbitration of all claims against SLRMC and remanded to compel arbitration on those claims so an arbitrator may decide arbitrability.
- The court affirmed the district court as to nonsignatory defendants (Iasis and individual SLRMC employees): under Utah law the appellants failed to show a recognized basis (estoppel, agency, veil-piercing, etc.) to bind nonsignatories to the Agreement’s arbitration clause.
Issues
| Issue | Plaintiff's Argument (Belnap) | Defendant's Argument (SLRMC & others) | Held |
|---|---|---|---|
| Whether the parties clearly and unmistakably delegated arbitrability to an arbitrator | The Agreement only made JAMS one option; parties could select another provider, so no clear delegation | Incorporation of JAMS Rules (including Rule 8(c)) is default and demonstrates clear and unmistakable delegation of arbitrability | Court: Held delegation was clear and unmistakable; arbitrator must decide arbitrability for claims against SLRMC |
| Whether the district court could decide scope/arbitrability before sending to arbitrator | Court should perform preliminary scope analysis to determine arbitrability | Where delegation is clear, the court must defer and compel arbitration so arbitrator decides scope | Court: Where delegation exists, court erred by deciding scope; must compel arbitration on all SLRMC claims and let arbitrator decide |
| Whether non-signatory defendants (parent company, individual staff) can compel arbitration under Utah law | Belnap: Agreement binds only parties; nonsignatories cannot enforce arbitration clause | Non-signatories: various doctrines (estoppel, agency, parent-subsidiary) allow enforcement | Court: Held nonsignatories failed to show Utah-recognized basis; affirmed denial as to non-SLRMC defendants |
| Whether a "wholly groundless" exception (allowing court to refuse arbitration if claim is wholly groundless) applies where delegation exists | Belnap urged adoption of the test to permit court to retain obviously unrelated claims | Defendants argued the Tenth Circuit should follow the majority rule requiring arbitration when delegation is clear | Court: Declined to adopt "wholly groundless" exception; followed majority circuits requiring deferral to arbitrator when delegation is clear |
Key Cases Cited
- Rent–A–Center, West, Inc. v. Jackson, 561 U.S. 63 (2010) (FAA enforces delegation clauses; delegation treated like any arbitration agreement)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (who decides arbitrability depends on parties’ agreement; clear and unmistakable standard for delegation)
- AT&T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643 (1986) (courts must not decide merits when parties agreed to arbitrate grievances)
- Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983) (doubts about scope favor arbitration)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009) (state law governs whether nonsignatory can enforce arbitration agreement)
- Oracle America, Inc. v. Myriad Group A.G., 724 F.3d 1069 (9th Cir. 2013) (incorporation of arbitration rules is clear evidence of delegation)
- Cooper v. WestEnd Capital Mgmt., L.L.C., 832 F.3d 534 (5th Cir. 2016) (same: JAMS/other rules incorporation shows clear delegation)
- Fallo v. High‑Tech Institute, 559 F.3d 874 (8th Cir. 2009) (majority‑circuit view that incorporating rules empowering arbitrators to decide jurisdiction is clear and unmistakable evidence of delegation)