266 P.3d 596
Nev.2011Background
- Respondent Rogers sued Pacificare for injuries allegedly caused by unsafe medical practices in a Medicare Advantage plan.
- Rogers enrolled in 2007 and 2008 plans; 2007 EOC contained an arbitration provision, 2008 EOC did not.
- District court held 2007 arbitration provision governed but deemed it unconscionable and unenforceable, rejecting preemption by the Medicare Act.
- Court determined the 2007 arbitration provision survived expiration of the 2007 contract because there was no express rescission, and the 2008 contract did not explicitly rescind it.
- Medicare Act preemption analysis concluded state unconscionability review is preempted to the extent it would regulate MA plans; CMS regulations under the Act render EOC 'marketing materials' and standards.
- Supreme Court of Nevada reversed, granting Pacificare's motion to compel arbitration and remanding for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the 2007 arbitration provision govern Rogers' dispute? | Rogers: 2008 contract governs; the 2007 clause was superseded. | Pacificare: the 2007 arbitration clause survives expiration absent express rescission and governs. | The 2007 arbitration provision governs. |
| Is Nevada unconscionability review preempted by the Medicare Act? | Nevada unconscionability doctrine remains applicable. | Medicare Act preempts state unconscionability review of MA plans. | Medicare Act preempts Nevada unconscionability review. |
| Do CMS standards include the arbitration clause within the EOC for preemption purposes? | Not necessary to preemption beyond statutory text. | Arbitration clause is marketing material and a CMS standard subject to preemption. | EOC arbitration clause falls within CMS standards and is preempted. |
| Does the preemption foreclose any inquiry into the clause's ambiguity or enforceability under state law? | Ambiguity could render unenforceable. | State law unconscionability is preempted; resolution in favor of arbitration applies. | Unconscionability inquiry foreclosed by preemption; resolve for arbitration. |
| Should the district court's denial of arbitration be affirmed, reversed, or remanded? | District court should enforce arbitration under 2007 clause. | District court should enforce arbitration under 2007 clause. | District court reversed; arbitration compelled; remand for further proceedings. |
Key Cases Cited
- Nolde Bros., Inc. v. Bakery Workers, 430 U.S. 243 (1977) (arbitration clause survives contract termination absent explicit rescission)
- Do Sung Uhm v. Humana, Inc., 620 F.3d 1134 (9th Cir. 2010) (preemption of state unconscionability review for MA plans)
- Int'l Assoc. of Firefighters v. City of Las Vegas, 104 Nev. 615, 764 P.2d 478 (1988) (arbitrability disputes favor arbitration)
- Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) (express preemption analysis; preemption language controls scope)
- CSX Transp., Inc. v. Easterwood, 507 U.S. 658 (1993) (plain text governs preemption domain)