Managed Care Advisory Group, LLC v. Cigna Healthcare, Inc.
939 F.3d 1145
| 11th Cir. | 2019Background
- Class-action settlement (approved Jan 30, 2004) resolved claims by medical providers against CIGNA; court retained jurisdiction over "interpretation, administration, and consummation" of the Settlement Agreement.
- MCAG (not a class member, not a party to the settlement) entered a separate arbitration agreement with CIGNA to resolve disputes over certain settlement distributions (Category Two claims).
- The arbitrator issued summonses to non-parties (settlement administrator Epiq and independent review entities (IREs)) to appear by video and bring documents; non-parties objected.
- MCAG moved in district court to enforce the arbitral summonses under 9 U.S.C. §7; the magistrate and district court enforced the summonses and denied CIGNA’s request to compel an accounting of funds MCAG received.
- On appeal, the Eleventh Circuit reversed enforcement of the video/remote summonses and reversed the district court’s denial of an accounting to the extent it concerned funds CIGNA already paid to MCAG (ordering an accounting on remand).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Finality of order enforcing arbitral summonses | MCAG: Order not final / not appealable | CIGNA/Epiq/IMEDECS: Order is final and immediately appealable under 9 U.S.C. §16(a)(3) | Court: Order is final and appealable — it disposed of all issues in that proceeding and sent parties back to arbitration |
| District court jurisdiction to enforce summonses | MCAG: Court retained jurisdiction over settlement administration, so ancillary jurisdiction exists | CIGNA: No federal-question jurisdiction; court cannot create jurisdiction by appointing arbitrator or by parties’ agreement | Held: Ancillary jurisdiction existed because arbitration related to settlement matters over which court retained jurisdiction; appointment of arbitrator/consent did not create independent jurisdiction |
| Nationwide service and personal jurisdiction | MCAG: §7 (incorporating Rule 45) permits nationwide service of arbitral summonses | Summonsed parties: Nationwide service and travel are unduly burdensome; due process limits apply | Held: §7 incorporates Rule 45 (including post‑2013 amendment) so nationwide service is permitted; summoned parties failed to show due‑process burden sufficient to defeat jurisdiction |
| Arbitrator power to require non-parties to produce documents and testify remotely (pre-hearing discovery; video testimony) | MCAG: Arbitrator may summon witnesses, require documents, and use video conferencing for testimony and document review | CIGNA/Non-parties: §7 limits subpoenas to in‑person attendance and document production at hearing; pre-hearing production and remote appearance exceed FAA authority | Held: §7 unambiguously requires physical presence before the arbitrator and does not authorize pre‑hearing discovery or remote appearance; district court abused discretion enforcing video/remote summonses and pre-hearing document production |
| District court’s duty to enforce settlement and compel accounting | CIGNA: Court must require accounting of ~ $25M paid to MCAG for class members | MCAG: Disputes over payments should be handled in arbitration | Held: District court abused discretion by deferring accounting to arbitrator for funds already paid; court must order an expeditious accounting (including interest) of previously‑paid settlement funds |
Key Cases Cited
- Green Tree Financial Corp.-Ala. v. Randolph, 531 U.S. 79 (2000) (defines "final decision" for §16(a) appeals)
- Jam v. International Finance Corp., 139 S. Ct. 759 (2019) (statutory references to general law incorporate subsequent amendments)
- Hay Group, Inc. v. E.B.S. Acquisition Corp., 360 F.3d 404 (3d Cir. 2004) (Section 7 construed to require in‑person testimony and document production at hearing)
- Life Receivables Trust v. Syndicate 102 at Lloyd’s of London, 549 F.3d 210 (2d Cir. 2008) (Section 7 does not authorize non‑party pre‑hearing document discovery)
- COMSAT Corp. v. National Science Foundation, 190 F.3d 269 (4th Cir. 1999) (arbitral subpoena power limited to FAA text; party may seek court‑ordered pre‑hearing discovery only on necessity)
- CVS Health Corp. v. Vividus, LLC, 878 F.3d 703 (9th Cir. 2017) (Section 7 does not permit third‑party pre‑hearing document production)
- Dynegy Midstream Servs. v. Trammochem, 451 F.3d 89 (2d Cir. 2006) (addressed §7 enforcement and appealability prior to Rule 45 amendment)
- Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S. 375 (1994) (ancillary jurisdiction to enforce settlement when court retains jurisdiction)
- Mayer v. Wall St. Equity Group, Inc., 672 F.3d 1222 (11th Cir. 2012) (post‑judgment order final if it disposes of the issues raised in the post‑judgment motion)
- In re Security Life Ins. Co. of America, 228 F.3d 865 (8th Cir. 2000) (contrast: court allowed some pre‑hearing document review by parties)