Oxford Health Plans LLC v. Sutter
133 S. Ct. 2064
| SCOTUS | 2013Background
- Sutter, a pediatrician, contractually agreed to arbitrate disputes with Oxford Health Plans for insured network members.
- Sutter filed a proposed class action in state court alleging Oxford failed to pay promptly and fully; Oxford moved to compel arbitration.
- Arbitrator ruled the contract authorized class arbitration; Oxford sought vacatur under FAA §10(a)(4).
- District Court denied vacatur; Third Circuit affirmed prior to Supreme Court review.
- Supreme Court held arbitrator’s decision survives §10(a)(4) review, focusing on contract interpretation rather than merits.
- Oxford must live with arbitrator’s interpretation of their contract; the question is whether the arbitrator construed the contract, not whether the interpretation was correct.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitrator exceeded powers under §10(a)(4). | Oxford contends misinterpretation amounts to excess of powers. | Sutter argues the arbitrator properly interpreted the contract. | No; arbitrator did not exceed powers; he interpreted the contract. |
| What is the proper scope of judicial review under §10(a)(4)? | Review should correct erroneous interpretation of contract. | Review is highly limited; focus on whether arbitrator construed the contract. | Limited review; only whether the arbitrator interpreted the contract, not merits. |
| Does Stolt-Nielsen control the outcome in this case? | Stolt-Nielsen invalidates class arbitration absent contractual basis. | Stolt-Nielsen lacks in this case because arbitrator construed and found an agreement. | Stolt-Nielsen does not override here; arbitrator construed contract and found authorization. |
| Does absence of class arbitration authorization bind absent class members? | Absent class members not bound by arbitrator’s decision. | Arbitration clause authorizes class proceedings; binding on class. | Concurring opinion discusses absent class members; majority holds arbitration authority extends to those legitimately consenting. |
Key Cases Cited
- Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010) (arbitrators may impose class procedures only with contractual authorization)
- Eastern Associated Coal Corp. v. Mine Workers, 531 U.S. 57 (2000) (arbitrator’s task is interpretation of contract; vacatur limited to exceeded powers)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (party seeking relief bears a heavy burden; arbitration favors finality)
- Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008) (limits on judicial review to preserve arbitration's finality)
- Enterprise Wheel & Car Corp., 363 U.S. 593 (1960) (arbitrator’s construction of contract bargained for; courts don’t second-guess it)
- Misco, Inc. v. Crescent Park)**, 484 U.S. 29 (1987) (arbitrator’s view of contract merits under §10(a)(4) is not vacated unless outside delegated authority)
- Green Tree Financial Corp. v. Bazzle, 539 U.S. 444 (2003) (discusses questions of arbitrability and class arbitration)
- Reed v. Florida Metropolitan Univ., Inc., 681 F.3d 630 (5th Cir. 2012) (cited for comparison on class arbitration)