Shahinian v. Cedars-Sinai Medical Center
194 Cal. App. 4th 987
| Cal. Ct. App. | 2011Background
- Shahinian, a Cedars-Sinai surgeon, sought to confirm an arbitration award after a dispute over his medical staff privileges.
- Arbitrator awarded Shahinian economic damages, emotional distress damages, punitive damages, and deemed a voluntary withdrawal of privileges.
- Cedars-Sinai argued the award violated public policy by bypassing peer review and by punitive damages being excessive.
- Settlement agreement in 2005 limited instrument access and required nondiscriminatory handling of privileges, with Shahinian paying $200,000 and releasing claims.
- Arbitration addressed whether Cedars-Sinai’s three letters restricting privileges were lawful and whether damages could be awarded without a peer review proceeding.
- Trial court denied vacatur and confirmed the arbitration award; Cedars-Sinai appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the emotional distress award was properly calculated | Shahinian guidance supported by two-to-one doubling | Doubling was arbitrary and not reasoned | No error; only limited review of award's merits or reasoning allowed. |
| Whether the arbitrator exceeded powers by not ordering peer review | Award did not violate public policy; parties did not waive peer review for competence | Public policy requires peer review for competence-related issues | Arbitrator did not exceed powers; no mandatory peer review requirement applicable here. |
| Whether punitive damages violated constitutional public policy limits | Award within arbitrator’s power under contract; no explicit prohibition | Punitive amount constitutionally excessive and not reviewable | Award upheld; no explicit contractual limit on punitive damages; due process limits not violated. |
| Whether the arbitrator’s overall award violated public policy or statutory rights | Award was within arbitrator’s scope and respected statutory procedures | Award contravened peer review/public policy | Affirmed; no public policy or statutory rights violated. |
Key Cases Cited
- Moncharsh v. Heily & Blase, 3 Cal.4th 1 (Cal. 1992) (limits on judicial review of arbitration; exceptions for public policy and statutory rights)
- Mileikowsky v. West Hills Hospital & Medical Center, 45 Cal.4th 1259 (Cal. 2009) (peer review process to protect patient safety and competent practice)
- Pearson Dental Supplies, Inc. v. Superior Court, 48 Cal.4th 665 (Cal. 2010) (vacating arbitration when unwaivable statutory rights are at issue)
- Rifkind & Sterling, Inc. v. Rifkind, 28 Cal.App.4th 1282 (Cal. App. 1994) (due process considerations in review of arbitral punitive damages in private arbitration)
- State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (U.S. 2003) (due process constraints on punitive damages; ratio guidance in arbitral context)