Rosenberg v. BlueCross BlueShield of Tennessee, Inc.

circumstances, of the rule to such

realizing that greed may favoritism or

present, adopted have special rules to the

effect representative’s conduct necessarily

does not entirely adeem the Ghent,

legacy bequest. Jeffrey See F.

Annotation, Ademption or Revocation of Guardian,

Specific Devise or Bequest by

Committee, Conservator, or Trustee or

Mentally Physically Incompetent Testa tor, 84 A.L.R.4th 1991 WL 741695

(1991). above,

For the reasons respect- stated I

fully dissent from that part majority

opinion upholds ademption. With exception, I majority. concur with the

Zachary ROSENBERG, M.D., et al.

BLUECROSS BLUESHIELD OF

TENNESSEE, INC., et al. Tennessee, Appeals

Court of

at Nashville.

April 2006 Session.

Nov. 2006. Appeal

Permission to Denied April

OPINION CAIN, J„ delivered B. WILLIAM court, in which JERRY opinion of SCOTT, SR., J., C. joined. WILLIAM M.S., KOCH, JR., P.J., separate filed opinion. concurring the trial court’s appeal results from This Arbi- Compel a Motion to granting order doctors, Rosenberg, Zachary tration. Two M.D., Darby, P. sued Dewayne M.D. and of Tennessee BlueCross BlueShield (“BCBST”) and the Tennessee Healthcare contract, seek- alleging breach Network status, in- requesting action and ing class Con- junctive relief under the Tennessee Act. From the trial Protection sumer arbitration, compelling order court’s affirm. appeal. doctors We

I. Facts M.D., otolaryn- Rosenberg, Zachary Dewayne P. Dar- gologist Memphis, M.D., by, family practitioner Jefferson agreements City, separate into entered Tennessee. Blue Cross Blue Shield of with Physician Agreements Participating These purpose by drafted BCBST for were services for obtaining the doctors’ medical alleged physicians The BCBST enrollees. that over the course complaint period systematically BCBST the contract for arbitrarily denied reimbursement by necessary charges claimed medically similarly situ- other physicians other- providers for ated medical service necessary procedures. medically wise types fourteen different allege doctors Kallas, York, York; Edith M. New New contract, constituting breach of conduct Tennessee, Steed, Nashville, L. David practices, business deceptive unfair or Rosenberg, M.D. appellants, Zachary conduct, which would oppressive otherwise Dewayne Darby, M.D. dam- compensatory doctors to entitle the injunctive relief. permanent Hicks, ages Mary Shockley, Gary C. John S. Miranda, Nashville, for the Ann Tennessee A. Contracts of Ten- BlueShield appellees, BlueCross give rise to Inc., The contracts which nessee, and Tennessee Healthcare Chancery complaint in Network, appellants’ Inc. formed in automatically incorporated were connection with BCBST’s shall be provision health insurance to its benefits herein the extent ren- the services part enrollees. As Physician dered pursuant BCBST, services, medical along these Agreement such affected Network, Inc., Tennessee Healthcare con- or not change, removal and shall be providers tracted with medical like Drs. Agree- deemed amendment to this Rosenberg Darby. In partic- order to ment, subject Phy- to right in ipate physicians BCBST’s network of to Agreement sician terminate this to treat patients, BCBST these doc- provided without cause as in Section who Physician tors chose to enter a into addition, In 12.2. and notwithstand- Agreement signed the same form contract ing foregoing, BCBST shall have prepared by BCBST. This document in- right to amend in Agreement this the following provisions cluded as of De- following proce- accordance with the 20, 2000: cember dure: If dispute, 8.2Arbitration. a other physi- 14.9.1 BCBST shall furnish dispute than a for which the resolution cian with the proposed amend- provided in for Re- Utilization ment in writing; Program, view arises between Physician thirty 14.9.2 shall have parties Agreement involving of this a (30) days delivery of the after party contention either that proposed which amendment in perform other has failed to its obli- respond writing to to gations responsibilities under this If Physician BCBST. either Agreement, party making then the accepts such amendment or promptly give such contention shall respond writing fails to written notice to the Such no- other. pro- within such period, the tice shall set forth in detail basis posed be- amendment shall contention, party’s for the and shall be come effective and therefore mail, sent certified return binding upon on Physician ,[I]f receipt requested... party Physician’s earlier of the writ- gave that notice of dissatisfaction re- acceptance expira- ten or the dissatisfied, party mains then the shall (30) day tion of such thirty notify party so the other the mat- period; and promptly ter shall be to submitted inexpensive binding Physician arbitration in If 14.9.3 notifies BCBST accordance with the Tennessee Uni- in writing by certified mail form Arbitration Act (30) at Tennessee within thirty days after Annotated 29-5-301 Code Section et the delivery proposed seq. Physician amendment

does accept proposed amendment, such amendment Except 14.9 Amendment. as otherwise shall not below, take effect provided Agreement, this or right article, section, exhibit, BCBST shall have the to any part, or (I) elect hereto, either to have this may Network Attachment amended, altered, Agreement remain in effect only or modified terms writing duly par- as both accordance with its executed (ii) However, change ... ... without the amend- proposed ties. (ii) ..., policies BCBST ment this procedures to terminate Dispute con- to initiate a that audit Agreement by giving written (15) failure days prior cerning notice that matter. fifteen period to the date of termi- Dispute effective within that initiate nation. this shall bar subsection specified related any type of action Physician Agreement to the addition causing Dispute, unless event doctors, provided signed by BCBST the time agree to extend parties Provider Admin- access to a “Commercial an action re- period initiating Manual,” “binding defined istration Dispute pursuant solve that used in the arbitration” term is procedure statement. Agreement: RESOLU- A. PROVIDER DISPUTE BE SUB- H. ALL DISPUTES WILL TION PROCEDURE ARBITRATION IF BINDING JECT TO BE TO THEY NOT RESOLVED CAN

I. INTRODUCTION. PUR- THE PARTIES’ SATISFACTION describes the ex- A. This Procedure II(A-C) OF SUANT TO SECTIONS resolving any clusive method STATEMENT. THIS PROCEDURE to a Provider’s Disputes related net- participation BCBST’s

work(s). by It incorporated ref- THE II. OF DIS- DESCRIPTION agree- erence into participation the PUTE PROCEDURE RESOLUTION (the parties ment between the D. ARBITRATION. BINDING “Participation Agreement”) If do not resolve their Dis- parties shall the termination of survive party may make a written pute, either Agreement. that request Dispute that be submitted (30) thirty arbitration within binding A an party G. must commence action days response it receives to its after a a Dispute pursuant to resolve the con- request for reconsideration or procedure within statement two Dispute. clusion of the mediation of (2) years after the date of the event parties agree, otherwise Unless the causing Dispute (e.g. occurred in accor- Dispute be arbitrated shall date of informing the letter current AAA Commercial dance with determination). Provider of a This Rules, Chattanooga, Ten- Arbitration peri- shall extend not will be con- nessee. The arbitration during Participating od which a (3) panel qualified of three by ducted Provider must submit a claim to arbitrators, agree parties unless the pursuant applicable pro- BCBST may The arbitrators sanc- otherwise. provider’s agree- visions in favor including ruling party, tion a ments) BCBST, although with par- if a appropriate, if party, the other may dispute Provider commence proce- ty comply applicable fails to of a claim that related the denial deadlines established those dures or timely was not filed in a manner Rules. Arbitration years no- receiving within two after for one- responsible Each shall be party If tice of the denial of that claim. adminis- agency’s half of the creating a matter BCBST discovers fee, fees and oth- the arbitrators’ Pro- trative Dispute Participating with a directly to conduct- audit, er related during expenses it shall have vider party shall ing that arbitration. Each years two from the conclusion of solely responsible otherwise be for dural technology” or “CPT” codes. The other expenses preparing incurred in for CPT codes designed by were the American participating Medical Association pro- adopted the arbitration cess, for including party’s attorney’s federal Center Medicare and Medicaid purpose easily identify- fees. Services ing type performed, of service required arbitrators: shall be general requirement expertise and re- issue a reasoned written decision ex- sources, complicated and the or routine plaining basis of their decision and nature procedure. of the billed These award; the manner of calculating any BCBST, claims were transmitted to who may punitive, not award or exemplary would then request grant review the damages; may vary or disregard the deny factors, the claim based on several terms of the participation Provider’s including a determination of the medical agreement, coverage certificate of necessity procedure. agreements, and other if applicable; and law; shall be controlling bound when Proceedings II. in the Trial Court issuing a concerning decision the Dis- pute. award, The arbitrators’ order or 25, 2002, Complaint April In their filed judgment binding upon shall be final and Rosenberg Darby sought Drs. and class parties. That may decision be en- they action certification and alleging tered and in any enforced state or feder- similarly providers situated medical were competent jurisdiction. al court of That the victims of a continued scheme of unfair modified, may only award deceptive practices on the business corrected[, vacated for the reasons or] part subsidiary of BCBST and its the Ten- set forth in the United States Arbitra- 32-page nessee Healthcare Network. The (9 1). § tion Act USC Complaint following specific contains the averments: E. EFFECTIVE DATE below, As discussed detail de- procedure This adopted statement was fendants have employed variety by BCBST on June 1997. This arbi- means to improper effect their and de- provision any tration supersedes prior scheme, ceptive including, but not limit- arbitration clause or contained to, following prac- ed one or more of the any other document. This arbitration tices: may clause be modified or amended

BCBST and the Provider will receive systematically deny Defendants reim- notice of through up- modifications bursement to TMA members for medi- dates to the Provider Manual.1 alia, cally necessary by, services inter (I) routinely unjustifiably refusing B. Performance for, for, pay to reducing payment agreements, Pursuant to the the doctors than per more one healthcare service incident, customarily would treat enrollee/patients visit or referred to as “bun- (ii) through routinely unjustifiably and then seek reimbursement dling”; process proce- reducing retroactively based on “current the amount of re- Dispute provided only 1. The Provider Resolution Procedure that the arbitrators could re- was amended November 2003 to alter attempt resolving verse a BCBST the dis- procedure time limits in the and to restrict upon pute showing that BCBST acted arbi- the remedies to exclude treble or extracon- trarily capriciously. addition, damages. policy tractual provisions applicable quired mem- under to TMA imbursement remitted (iii) bers, law. “downcoding”; to Tennessee State referred in- unjustifiably denying routinely and to sufficient provide fail Defendants for of reimbursement creased levels payment their denials explanation for require medical complicated cases reductions. to extra time and expend TMA members pro- refuse consistently to Defendants pa- resources on treatment participating physicians vide (iv) “modifiers”; to as tient referred for fee schedules Current BCBS-TN’s unjustifiably refusing routinely and (“CPT”) Terminology Codes Procedures special- by physician for treatments pay (the recognized by physicians codes by falsely claiming that referrals ists reimbursement). insurers for pri- patients’ not obtained from were require to en- physicians Defendants mary physicians. care physician agreements into ter one-sided systematically deny pay- Defendants provide them medical in order for medically ment TMA members for who healthcare patients care to receive fi- necessary claims to achieve internal managed care through defendants’ indi- targets regard nancial without for plans. patients’ by, needs inter vidual medical un- (I) improper, 5. As a result alia, improperly employing software scheme, defendants deceptive fair automatically programs downcode and/or of millions deprived TMA members have procedures deny payment phy- and/or lawful “high utilizers” of dollars of reimbursement sicians identified as review, oversight clinical to defen- provided without healthcare services (ii) justification; engaging physician plan members. dants’ profiling purpose penalizing for timely and reimburse- Adequate physicians provide in ex- who services necessary to are ments TMA members arbitrary “targets”; cess of BCBS-TN’s are to physicians ensure that able to (iii) improperly applying so-called practices provide to medi- maintain their “guidelines” a manner that BCBS-TN patients. to The deliv- cally sound care for purpose knows is unreasonable promised ery of services healthcare denying payment coverage for depends on reimbursement defendants necessary medically treatments. delivering adequate to cover the costs provide adequate Defendants fail to failure to healthcare. Defendants’ such staffing inqui- handle to TMA members’ to TMA mem- reimbursement provide regard, has cre- ries. In this BCBS-TN adequate cover the costs which is to bers maintains inefficient admin- ated and an to services delivering healthcare system to frustrate designed istrative enrollees has resulted BCBS-TN’s plaintiffs by requiring physi- payment to hardships for defendants’ tremendous telephone inqui- cians to make excessive participating physicians. proper to reimbursement ries obtain sought relief particular note Of claims. Complaint: unjustifiably routinely Defendants WHEREFORE, demand payments to TMA members fail make that, by jury, this Court enter upon trial prescribed time period within the as follows: judgment against defendants State provisions of Tennessee applicable practices, Declaring fail defendants’ law, routinely unjustifiably herein, deceptive constitute re- as described pay past-due interest on (iv) acts practices that are unlawful un- denying payment of modifiers for der the Tennessee Consumer complicated Protection medical that in- cases Act of and awarding plaintiffs and volve excessive time and re- sources; the Class compensatory or actual dam- ages damages; treble and/or (v) continuing to proce- downcode performed dures

b TMA Declaring that mem- defendants breach- bers; contracts, ed the terms of their as de- herein, scribed and awarding plaintiffs (vi) continuing to use software that and the compensatory Class or actual automatically downcodes health- damages; care provided by services TMA members;

c Declaring that prac- defendants’ tices as (vii) described herein violate T.C.A. failing to pay specialists for lack § 56-7-109 and awarding plaintiffs and of a referral when a referral was compensatory Class submitted; actual dam- ages punitive damages; and/or (viii) continuing deny reimburse- Awarding

d plaintiffs punitive ment dam- to TMA members who are ages; utilizers”; “high identified as (ix)continuing to provisions violate Awarding

e plaintiffs their costs and statutory Tennessee law regarding disbursements incurred connection payment interest; action, with this including reasonable at- fees, torneys’ expert witness (x) fees and forcing physicians and their staff costs; other to expend unreasonable amounts of time and attempting resources f Declaring that this prop- action is a to obtain the reimbursement er class action and certifying appro- they entitled; priate plaintiff pursuant class to Tenn. 23; Civ.Proc.Rule (xi) failing provide adequate expla- nations for the denial of claims g Awarding plaintiffs permanent in- reimbursement; for junctive prohibiting, relief restraining, and enjoining (xii) engaging defendants from failing to procedures ensure that complained herein, the conduct in- physicians’ exist so that cluding, inter alia: for appropri- reimbursement are ately adequately

(I) considered continuing to direct their internal manner, in timely initially both agents to reduce fully deny or re- and in the appeals process; imbursement without regard to validity (xiii) the or necessity of the ser- exploiting parties’ unequal the provided; vices bargaining power in order to physicians force to enter into (ii) continuing to employ so-called one-sided contracts on a take-it- “guidelines” in an improper man- basis; or-leave-it ner deny to claims for reimburse- ment; (xiv) failing provide to adequate for staffing to physi- handle TMA (iii) continuing to bundle claims for cian inquiries; separate procedures thereby de- (xv) nying TMA members all part or refusing provide participating payment pro- the due for physicians some with fee schedules to cedures; be applied to CPT recog- codes the However, that trial court indicated the by physicians insurers nized the reimbursement; procedure described arbitration for re- The court cost-prohibitive. DRP was (xvi) continuing arbitrary corporate briefing question on the quested additional policies requirements and test “inexpensive whether the denying specif- payments for “illusory.” unenforceable clause” was necessary medically types ic treatments; The Order B. Second

(xvii) interfering or otherwise 3, 2005, receiving after February On obstructing right to full briefs, court made supplemental timely to TMA reimbursement entered an order about-face and apparent members; and Compel Arbitra- Motion to granting the further Granting h. such other and following contains the tion. That order just as the deems relief language: proper. the Court was The one issue which sought that relief far It is well to note sub- papers unable decide on the first outstrips value of individual claims. requir- the clauses mitted was whether very doctors It is for this reason dis- ing physicians to submit their establish a class sought aggregate and unenforceable pute to arbitration were plaintiffs. of affected The demand itself costs of arbitration versus because the claims that re- reveals that individual expensive as to court were so deter main are not underpaid unreimbursed redressing from prevent plaintiffs real in the involve issues case which argument The plaintiffs’ their claims. participating providers the burden to all prohibitive was that arbitration was cost dispute created BCBST’s use challenges to plaintiffs’ in the plank one in- leading up resolution to and procedure enforceability of the arbitration cluding arbitration. challenge plaintiffs’ The other clauses. A. Motion Arbitrate enforceability to the papers first clause made response to the Complaint, BCBST a con- the arbitration clause was its Arbitration and Compel filed Motion rejected tract of adhesion. The Court on Stay Pending to Dismiss or Arbitration only argu- argument.1 Thus May Discovery commenced left was the issue ment of the Motion, resolution of the pending the prohibitive. being cost of arbitration discovery occupied various skirmishes its argument this on Unsure whether entry the of the parties and the court until a for not enforc- provide own could basis specifically addressing first of orders two clauses, the the Court ing arbitration Compel Motion to Arbitration. the briefing. requested additional that arguing the Motion doctors resisted procedure described the arbitration Tracking Burac the law established in Procedure Dispute Resolution BCBST’s (1996) and zynski Eyring, 919 314 v. S.W.2d (“DRP”) illusory cost-pro- to its due HEPACO, Inc., Vickery Transp., 2004 Inc. v. part the nature unenforceable the concluded that hibitive WL Court argument Blue Blue plaintiffs’ that Cross/ In first the of a contract adhesion. 20 to 40 Market share of Shield’s Tennessee 1, 2004, the trial entered December order factor be used percent not kind of is specifically physician found that court bargaining power evaluating relative agreement of adhesion. does was not contract agreement parties to an arbitration provide not a basis on which to conclude that the arbitration clause is a contract of adhe concludes, however, The Court that even sion. if it were to that determine the arbitration After having supplemental reviewed the applied clauses as to individual physicians’ law, briefs and having studied case small prohibitive claims are cost and there- plaintiffs’ argu- concludes that illusory, fore Court can this not use ment is prohibitive arbitration cost determination to set aside the application does not apply to the lawsuit pending be- of the arbitration clauses to this case. In- and, Court, therefore, fore stead, is not a this Court understands from its re- deny basis on which to arbitration. view of the law the relevant inquiry More case whether the cost of arbitration of briefing is TMA’s this case: needed on claims. The multiple of wrongdoing claims and de- reasoning Court’s order is as follows. ception and the causes of action before the The issue before the Court derives from Court of violation the Tennessee Con- the U.S. Court’s statement Act, enrichment, unjust sumer Protection Corp. Alabama, Green Tree Financial et — Prompt Pay violation of the Act Tennessee al. v. Randolph, Larketta 531 U.S. contract, and breach prohibitive is cost (2000), 148 L.Ed.2d 373 “It may such that provide arbitration does not well be large that the existence of arbitra plaintiffs a forum remedy. viable tion costs could ... preclude litigant focus, identifying upon this Court’s it relies from effectively vindicating ... right....” guided and is v. Rockwell Bradford progeny Green Tree’s the federal circuit Inc., Systems, Semiconductor 238 F.3d 549 courts has contoured what kind of (4th facts of Cir.2001) in court held that expense arbitration versus court expense a appropriate inquiry determining for party opposing arbitration must demon whether an arbitration clause is unenforce- strate to court to “a case-by-case analy- authorize a “red-line” an able due to costs is focuses, require among things, arbitration sis that other party upon clause or ability pay the claimant’s submit to arbitration. costs, expected fees and cost differen- In the the plaintiffs case at bar do not tial between litigation specifically cost of address the arbitrating court, and whether cost differential is

this case—a alleging lawsuit numerous and so substantial deter bringing as to systematic acts, deceptive breaches of con- Additionally, claims.” Id. at 556. Circuit tracts, unjust promptly pay failures to Stores, Adams, City Inc. v. 532 U.S. Instead, enrichment. argue (2001); 149 L.Ed.2d 234 arbitrating that the costs of each individual Inc., Finance, Livingston v. Associates physician underpayment claim of a (7th Cir.2003); 339 F.3d v. Musnick reimbursement —which are the Lauderdale, King Motor Co. Fort. wrongful deceptive up acts make (11th Cir.2003); F.3d Morrison and constitute some facts and evi- Inc., (6th Stores, City Circuit 317 F.3d 646 dence prohibitive of this cost lawsuit—is Cir.2003), require specific, all concrete physicians such that the do not have a proof of From speculation. costs not these remedy forum viable to redress these sources, the Court concludes that the costs illusory small claims. The arbitrating it the costs must assess are of claims, underlying clauses of these alleged systematic, the the it: lawsuit before argue, merit plaintiffs appear deceptive underpay- to not forc- and acts of numerous ment, of ing plaintiffs arbitrating separate- the in this case to arbitration. not the costs

901 of concerning the cost arbi analysis its underlying underpayment claim of ly each of claims, considering only the claims whether, those arbi- tration and based on Darby. Rosenberg plaintiff, a viable fo- each plaintiffs the provides tration to Also, the determination reaching rum. alter, plaintiffs’ motion deny the clarify, has the Court amend sup filed in affidavits considered new Court, therefore, concludes that the This motion, being those plaintiffs’ the port of to demon- physicians have failed plaintiff and Beth Betty of Prescott affidavits arbitrating the that the cost of strate pro failed to The have plaintiffs Glenn. prohibitively is above-captioned lawsuit to the explanation Court vide a sufficient judicial more than a forum. The expensive out in these affidavits why the facts set motion to grants the defendants’ Court the to the plaintiffs not available were to arbitrate compel plaintiff physicians the hearing on the motion took the time in this lawsuit. The their claims asserted 4, 2004, nor the on November how place physicians of claims of the the defendants’ plaintiffs diligence exercised due to se conduct, including deception wrongful hearing. prior the to the cure evidence clauses of the claims the arbitration Currey, v. S.W.3d 32 Robinson 153 physician illusory contract are each cost Seay City (Tenn.Ct.App.2004); claims, prohibitive for individual shall be Knoxville, (Tenn.Ct.App. 397 S.W.2d determined arbitration. 1983). Interlocutory Appeal C. Issues for a Rule plaintiffs’ to the motion As grants interlocutory appeal, the Court 25, 2005, April In an order entered need motion on the sole basis Alter, trial court denied a Motion to body law. develop a uniform Clarify Amend and filed doctors Rosen- very is little law in Tennessee There berg Darby granted the doctors’ interpreting the developing and Green Interlocutory Appeal. Rule 9 Motion for v. Ran Corp. Financial Tree — Alabama That following pertinent order contains the 513, 148 dolph, provisions: (2000) exception arbitra L.Ed.2d plaintiffs’ denies the motion Court prohib is cost where the arbitration tion alter, clarify February amend and this of law Because of absence itive. compelling plaintiff[s] 2005 order alone, the and on that basis Tennessee their claims. The reasons arbitrate interlocutory appeal. grants the Court for the Court’s denial are as follows: correctly has is convinced it This Court 1. The Court maintains its conclusion the Greentree applying decided this case February in the 2005 order stated cases from oth standard and Financial have not carried their jurisdiction. er demonstrating that the cost of burden the Rule 9 During pendency of arbitrating above-captioned matter stay this shall not its order appeal Court than prohibitively expensive more Arbitration compelling arbitration. reaching proceedings. court pursuit tandem proceed shall February conclusion 2005 order appeal. Rule 9 reaffirming and in that conclusion here- 25, 2005, in, granted this May On Court analyzed has not case application Rule as to the sole damages in terms a doctors’ and costs time, appeal at that whether has conducted issue on class action. The Court parties’ arbitration is unenforceable jealousy “be- survived for long so a period cause the costs of arbitration are expen- so principle the firmly became embed- sive as to deter prevent the English ded common law and was from redressing their adopted claims.” On June by with it the American courts. 23, 2005, granted we the Appellants’ Mo- The courts have felt that precedent Clarify tion to expanded Amend and was too strongly fixed to be overturned appeal issues on to include following: legislative enactment, without although they have frequently criticized the (1) rule Whether the trial court incorrectly recognized illogical its nature and ruled that “the arbitration clauses injustice which results from it. This part not of a contract of adhe- bill declares simply that such agree- sion.” ments for enforced, arbitration shall be (2) Whether the trial incorrectly court provides procedure in the Federal ruled that the defendant’s substan- courts for their enforcement.” HR Rep tial market share is “not the kind of 96, (1924). Sess, No. Cong, 68th 1st 1-2 factor to be used evaluating the bargaining power relative par- of the Dean Witter Reynolds, Inc. v. Byrd, 470 ties to an agreement and U.S. 105 S.Ct. 84 L.Ed.2d (1985). does not provide a deny basis to 164-165 arbitration.” Any doubt as to scope of the Federal Arbitration Act has been likewise set to Metamokphosis III. The of Arbitration by rest Court. Seldom has a time-honored rule of com- Section 2 Congressional is a declaration mon law decisively been so reversed and of a liberal federal policy favoring arbi- supplanted by an even stronger statutory agreements, tration withstanding mandate to the contrary than is evidenced any state’s substantive or procedural present exalted status of arbitra- policies to the contrary. The effect of tion. The Federal Arbitration Act enacted the section body is to create a of federal (9 1-14) Congress §§ 1925 USC substantive arbitrability, law of applica- enacted for the specific purpose of over- any ble to agreement within turning the Common Law Rule under coverage of the Act. agreements to arbitrate were ren- impotent. dered As observed the Su- that, Arbitration Act establishes preme States, Court of the United law, a matter of federal doubts con- reason motivating the Congress to enact cerning scope of arbitrable issues the Federal Arbitration Act was carefully should be resolved favor of arbitra- explained in HR Rep. No. Cong, 68th tion, problem whether the at hand is in (1924). Sess, 1st page the construction of the contract lan- According Report: to the guage allegation waiver, itself or an “The need for the law arises from an delay, or a like defense to arbitrability. anachronism of our American law. H. Hosp. Moses Cone v. Mercury Constr. Some ago, jeal- centuries because 1, 24-25, Corp., 460 U.S. ousy English courts for their own (1982). L.Ed.2d 765 jurisdiction, they refused spe- to enforce agreements cific upon arbitrate That the Federal Arbitration Act dis- ground that thereby places courts were non-conforming state law and is jurisdiction. ousted from their This binding on state is equally courts well set-

903 Am., 475 U.S. Keating, 465 munications Workers by Corp. tied v. Southland of (1984). 648, 1415, 1, 643, L.Ed.2d 648 852, 1 106 S.Ct. 89 104 S.Ct. 79 L.Ed.2d U.S. (1986). agree to arbitra vigorous parties over When Keating was determined of tion, enforcement of the FAA ensures dissenting opinion Justice O’Connor withdrawing “the by subsequently agreement Rehnquist, who were Justice judicial require to joined by power Scalia of the states dissent Justices v. resolution of which Thomas. Allied-Bruce Terminix Co. forum Dobson, 834, to resolve 265, contracting parties agreed 130 513 U.S. 115 S.Ct. (1995). Corp., 465 Allied- Southland By L.Ed.2d 753 time arbitration.” 1995, 852, 10, 79 L.Ed.2d 1. Bruce Jus at 104 S.Ct. Terminix decided U.S. O’Connor, However, FAA, maintaining personal par tice her consistent with the Keating may only as certain issues expressed agree views surrendered ties or that to stare decisis and concurred the Keat- be to arbitration will submitted ing rule. Sca- will at all. Mitsu they Even combative Justice not arbitrate Cf. forsaking Corp. Chrysler- fur v. lia announced he was bishi Motors Soler Inc., 614, 628, from rule in v. 473 105 Plymouth, ther dissent Southland U.S. (1985). 3346, “I Keating, uttered a conditional shall L.Ed.2d 444 but S.Ct. 87 Scalia, will, “I how return”. Said Justice Therefore, question essentially be- ever, ready jus four join stand to other say the contract has to comes “what Allied-Bruce, in overruling tices it.” 513 arbitrability petitioner’s about 285, (Scalia, at dis 115 S.Ct. 834 J. Mastrobuono, 58, 514 U.S. at claim....” senting). Only Justice Clarence Thomas 76. If the 131 L.Ed.2d unmoved against remained the tide agreed case to arbitrate parties Keating. Southland v. inducement, claim fraudulent then despite prohibition such a under Tennes- compelled States thus to sub law, submitted to see the claim must be mit to Arbitra the dictates the Federal parties Conversely, if the arbitration. Act, tion as observed but not to arbitrate claim agree did Tennessee, only Court of the Federal Act inducement, they can fraudulent then applies agreements and the to to claim compelled not be arbitrate parties struc contract remain free to arbitrability under the FAA. despite its they ture arbitration agreements their They may L.L.C., fit. see likewise limit Gatlinburg, 9 v. Frizzell Const. Co. they (Tenn.1999). contract the issues choose S.W.3d may the rules under specify arbitrate Analysis IV. which that arbitration will be conducted. L.L.C., Gatlinburg,

Frizzell Co. v. Const. rule, As a court’s en general (Tenn.1999). S.W.3d 79 forcement of Cooper v. MRM “proarbitration policy does reviewed de novo. See The FAA’s Cir.2004). (6th Co., F.3d operate regard not without to the wishes Inv. to compel on a motion contracting A trial court’s order parties.” Mastrobuo no, primarily itself 131 arbitration addresses 514 U.S. contract law. We review application is a 76. Because “arbitration L.Ed.2d presumption no of cor contract[,] cannot an order with party ... a such matter of Pyburn v. Bill appeal. rectness on See to arbitration required submit Chevrolet, 351, 356 63 S.W.3d agreed he so Heard dispute which has Techs., v. see also Nelson (Tenn.Ct.App.2001); submit.” AT & T Inc. Com 904 Stores, Inc., 625,

Wal-Mart illusory remedy 8 S.W.3d 629 an due to the unknown (Tenn.1999). However, to the extent that costs arbitration. From the Eleventh findings of fact necessary are concerning Opinion reversing part, Circuit Green “cost-prohibitive” nature of the arbi review, Tree obtained In certiorari. its sought, tration findings these come to us Supreme began with a familiar presumption with a of correctness absent a starting point. Any inquiry regarding the preponderance of evidence to the contrary enforceability agreement of an arbitration 13(d); Tenn.R.App.P. T.R. Mills Contrac starts with the now purpose well-settled al., tors v. Enterprises, WRH LLC et 93 behind the Federal Arbitration Act. See 9 861, (Tenn.Ct.App.2002). S.W.3d 864 § 2: U.S.C. 2 provides Section of the FAA that “[a]

A. Enforceability provision written in any maritime trans parties, Because the as well as the trial action or a evidencing contract a trans judge, relied on the Supreme U.S. Court’s involving action commerce settle decision Green Tree Financial v. Ran- arbitration controversy thereafter aris dolph, this case must be reviewed as a ing out of such contract ... shall be starting point analysis for the of enforce- valid, irrevocable, enforceable, save ability. ... question “[W]e address the upon grounds such as exist at law or in whether an arbitration agreement equity for the revocation of con does not mention arbitration costs and fees 2], § § tract.” 9 USC 2 [9 USCS is unenforceable it because fails to affirma- considering respondent’s agree whether tively protect party potentially from unenforceable, ment to arbitrate is we steep arbitration costs. We conclude that purpose mindful of the FAA’s “to agreement’s arbitration silence with re- judicial reverse the longstanding hostili spect to such matters does not render the ty to agreements arbitration ... and to agreement unenforceable.” Green Tree place agreements upon Corp. Randolph, Financial v. 531 U.S. (2000). footing same 121 other contracts.” Gil S.Ct. L.Ed.2d 373 148 mer v. Corp., Lane Interstate/Johnson Green Tree involved a financing agree- 20, 24, 500 111 S.Ct. 114 ment for a unit of manufactured housing. (1991). L.Ed.2d 26 agreement This included an arbitration clause that did not affirmatively disclose Green Tree Financial Corp., 531 U.S. at the costs of arbitration to the consumer. 89,121 consumer, Randolph, the sued the lenders issue, In a five-to-four decision on the Alabama, in U.S. District Court in alleging Court held silence as to Act, violations in Lending of the Truth 15 costs of arbitration did not render § seq., Equal U.S.C. 1601 et and the Cred- may clause unenforceable. “It well be that Act, Opportunity §§ it 15 U.S.C. 1691- large the existence of arbitration costs 91(f). From the District Court’s order preclude litigant Randolph could such as (Green arbitration, compelling Tree Finan- effectively vindicating from her federal Corp. Randolph, cial v. F.Supp. statutory rights in the arbitral forum. But (M.D.Ala.1997)), Randolph appealed to the the record does not show that Randolph Circuit, Appeals Court of for the Eleventh will bear such if goes costs she to arbitra Randolph Corp., v. Green Tree Financial (11th Cir.1999) 178 F.3d 1149 tion.” Green Tree Financial arguing Corp., 90, 121 made arbitration U.S. at S.Ct. 513. al., et Eyring, 919 S.W.2d recognized Buraczynski dearth of The dissent (Tenn.1996). proposing record information when of the issue. an alternate resolution stipulate case the instant parties III, in Part the Court airs On matter place regard- has taken that no arbitration 521-522, ante, 89-92, 121 S.Ct. at alleged in the Com- ing of claim any denial L.Ed.2d, at of the 382-384—allocation affidavit Rosenberg’s Dr. plaint. Neither of would not rule costs arbitration —I Prescott, em- Betty of an nor the affidavit Instead, I definitively. vacate the would ag- a Darby, specific Dr. states ployee of decision, which Eleventh Circuit’s dis- Upon of denied claims. gregate amount declared the arbitration clause positively Relief, Prayer it becomes for reviewing unenforceable, case and remand the for that, justifying purpose clear for arbitral fo- closer consideration under or a claim class action certification accessibility. rum’s Act, Protection the Tennessee Consumer Corp., Tree Financial 531 U.S. at Green Rosenberg Darby argue doctors J., 93-4,121 (Ginsberg, S.Ct. 513. dissent- indeed, are damages great ing) granted. injunctive broad relief should be However, of unconsciona- purpose for has

The Tennessee rec- the doctors agreement, ble effect ognized enforceability of arbitration minimal their claims are of assert agreements under Tennessee’s version of value, years. if over two aggregated even Arbitration Act: the Uniform particular are the arbitration Of concern adopted has a version of Tennessee remedy arrangements cost splitting the Uniform Arbitration Act. Tennes- in the provisions agreement. limitation version, Act, like the is see’s Uniform authority in We note the same dearth specifi- not general its terms does Looking Tennessee, trial court. as did the agree- cally physician-patient include issue jurisdictions addressing the to other however, has, ments. Tennessee split unconscionability of alleged specific gov- chosen enact statute re- provisions in a contract arbitration fee erning agreements arbitration between much is reveals that quiring arbitration providers patients. health care is in of case which dependent type on enforcement, respect With Ten- ar- particular fee-splitting issue and the provides: nessee Act rangement. any A agreement written to submit controversy

existing to arbitration or heavily Brad- court relied on trial Inc., in a written contract Sys., v. Rockwell Semiconductor ford controversy Cir.2001). (4th to arbitration submit That case 238 F.3d 549 parties arising thereafter between the charging employ- his employee involved valid, is enforceable irrevocable discrimination violation age er with upon grounds as exist at save such in Employment Discrimination “Age for revocation of equity § law or in 1967, §2 seq., 29 U.S.C.A. Act of et any contract.... unusual has a rather et This case seq.” 2-5-302(a) employee first demand- history § in that (Supp. Ann. Tenn.Code February 1995). filed petition ed Accordingly, under the terms and, claim the arbitration statute, while agreements gen- September on pending, filed suit grounds unless erally enforceable District Court in 1998 in the United States equity for their revocation exist of North Carolina Eastern District contract law. asserting the same claims as were only before record reveals [t]he the arbitra- the arbitrator. The case was tried in arbi- agreement’s tion silence on the sub- May tration on 17 and 1999. The ject, and that fact alone plainly July District Court on granted insufficient render it unenforceable. Rockwell’s Summary Judgment Motion for Randolph The risk that will be sad- concluding that Bradford had failed to prohibitive dled with spec- costs is too meet his burden of demonstrating that the ulative justify the invalidation of arbitration agreement was unenforceable an arbitration agreement. To invali- against him because he had failed to offer date the agreement on that basis any competent split- evidence that the fee would undermine the liberal federal ting would cause him financial hardship. policy favoring agree- arbitration 20, 1999, On October the arbitrator ruled ments. It would also conflict with our against claims, Bradford and dismissed his prior holdings that party resisting the meantime, 27, 1999, but in August on arbitration bears the prov- burden of Bradford appealed had the District Court’s ing that the claims at issue are unsui- summary Thus, judgment. only issue table for arbitration. before the Fourth Circuit Court of Appeals (internal quotation Id. marks and cita- was his claim that fee-splitting provi- added). emphasis tions omitted and contract, sions of the relative to arbitra- The Court further stated that have tion, “[w]e deprived him of an adequate forum. party held that seeking to avoid Following discussion, an extensive arbitration bears the burden of estab- Court held: lishing Congress pre- that intended to Our conclusion that proper inquiry statutory clude arbitration of the claims case-by-case analysis is a rather than a Similarly, at issue. we believe that per se rule is bolstered where, here, party a seeks to invali- Court’s recent decision Green Tree agreement date an arbitration on the Corp.-Alabama Financial Randolph, ground that arbitration prohib- would be 148 L.Ed.2d itively expensive, party that bears the (2000). Tree, In Green the Court showing burden of in- likelihood of addressed whether an agree- arbitration curring such costs. Randolph did not ment that does not mention arbitration (internal meet that burden.” Id. cita- costs and fees is unenforceable because omitted). words, tions In other it fails to affirmatively protect party a rejected Green Tree Randolph’s potentially from steep arbitration costs. argument Randolph because could not Id. at In resolving this question, satisfy establishing her burden of that recognized may the Court that [i]t well likely prohibitive she was to incur costs large be that the existence of arbitration that arbitrating would deter her from preclude litigant costs could a such as her claims. We believe that the Green Randolph effectively vindicating from Tree Court’s focus on each individual statutory rights her federal in the arbi- proving claimant’s burden of that tral forum. Id. at 522. The Court not- issue are unsuitable for arbi- ed, however, that the record does tration, emphasis Randolph’s its on ina- show that Randolph will bear such costs bility likely to show that she in fact Indeed, if goes she to arbitration. it costs, prohibitive to incur and its refusal hardly any contains information on the nullify matter. Id. Accordingly, agreement the Court stat- ed that upon an speculative based abstract and omitted). As Gil- might, (quotation that under some L.Ed.2d risk the claimant costs, clear, circumstances, is federal anti-discrimi- prohibitive incur mer makes a remedial play The Green Tree Court’s statutes both significant. Id. nation Although the former accept speculative risk refusal deterrent role. rights might largely a incur a matter prohibitive that claimant role is individuals, the lat- those particular aggrieved costs undermines the rationale of pur- impose per prohi- question that se is a of broader social courts would ter an Id. deterrent function against provision poses. bition is, employ- might impose prohibitive question part, costs that laws theory discriminatory prac- on against engage individual ers who costs, they if incur prohibitive may such risk of even tices aware uncertain, If, entirely surely that risk one how- liability more than case. ever, bringing provision deters the of arbitration. would de- cost-splitting potential number of ter substantial Sys- v. Rockwell Semiconductor Bradford litigants, then that undermines (4th tems, Inc., 238 F.3d 556-57 Cir. the deterrent effect of anti-discrimi- 2001). Thus, in pro- nation order to statutes. majority In an en opinion, banc issue, statutory rights tect in Mor- Appeals the Sixth Circuit Court must look to than reviewing court more Stores, Inc., City rison v. Circuit 317 F.3d a just par- the interests and conduct of (6th Cir.2003) 646 restricted the Bradford plaintiff. particular plaintiff A ticular approach something and introduced pursue her may be determined to his or action type inquiry. class claims, regardless of costs. But a court considering cost-splitting pro- whether Case-by-Case Approach B. Revised is consider vision enforceable should hold must potential litigants We similarly potential litigants, situated given opportunity, prior an to arbi- a larger costs loom as con- whom will merits, tration on demonstrate is, cern, large part, it in because potential that the costs of in deter presence system that will great to deter them similar- enough practices. Nothing discriminatory ly seeking situated individuals from a case-by-case Tree suggests Green statutory rights vindicate their federal analysis not treat similar cases should in the approach arbitral forum. Our similarly. case-by-case approach differs from the reason, reviewing For this if the court by looking advocated in to the Bradford cost-splitting provision finds that possible chilling cost-split- effect of the would deter a substantial number similarly po- ting on situated it similarly potential litigants, situated litigants, opposed its effect tential cost-split- to enforce the should refuse merely plaintiff on the actual un- in order to serve the ting provision given approach case. This difference derlying statute. functions federal Gilmer, premised on which held Cir.2003). (6th at 663 317 F.3d long litigant ef- prospective as the [s]o age fectively and Morrison are may vindicate stat- Both [his her] Bradford on civil utory action in arbitral fo- cases based federal cause of discrimination follows, rum, strictly rights will continue to serve statutes. statute Bradford cost-splitting provisions function. both its remedial and deterrent as to agreement, the individualized 500 U.S. at mandates of Tree. potential Green Morrison adds that the costs of arbitration are great enough an element that in federal civil to deter them rights cases and similar- ly situated individuals from strips analysis seeking its individualized vindicate their statutory rights component and asserts an element involv- federal (em- in the arbitral forum.” Id. at 663 ing deterrence of potential claimants simi- added). phasis Cooper, a second Title larly situated. case, employment VII discrimination Morrison applicable is not to the case at upheld also a district court’s refusal to bar for reasons stated the Sixth Circuit enforce an arbitration clause where the Appeals Court of T.K Stutter v. Con cost of prohibitive. arbitration was structors, (6th Cir.2006). Inc. 448 F.3d 343 F.3d at 510-12. Cooper explicitly held That case did not involve federal civil objective that the of its cost deterrent rights statutes. The claimants asserted analysis was “to serve underlying state law claims relative misrepresenta functions of the federal statute.” Id. at tion and breach of contract with federal Morrison, 663). (quoting 317 F.3d at jurisdiction upon diversity based of citizen A third case is relevant. Green Tree ship. The Court held: Corp. Randolph, Financial 531 U.S. by applying district court erred 148 L.Ed.2d 373 federal common law rather than consid- (2000), predecessor to Morrison and ering state law contract Spe- defenses. Cooper, exclusively dealt with the arbi- cifically, the court holdings relied on our tration of statutory federal claims. Cooper v. MRM Investment Co. and case, Court held that Stores, Inc., Morrison v. City Circuit agreement invalidation of an arbitration supra. on the basis that arbitration was cost- clearly holdings We limited our in prohibitive was in error where the Morrison and Cooper validity to the agreement was silent as to how the employment clauses in plaintiff and the defendant would share agreements an employee’s where statu- 91-92, the costs. Id. at 121 S.Ct. 513. torily rights created federal civil at are The plaintiff Court wrote that Morrison, issue. employ- Title VII such a case bears burden of estab- case, ment discrimination held that an lishing that Congress pre- intended to may arbitration clause be unenforceable statutory clude arbitration of the claims if the cost of arbitration would under- at plaintiff likely issue and that the purposes mine “the of federal anti-dis- suffer the costs of arbitration. Id. legislation” crimination by deterring po- 121 S.Ct. 513 531 tential pursuing claimants from their 148 L.Ed.2d 373. Morrison, According

claims. the res- Tree, Cooper Green Morrison and olution of an rights dispute arbitral civil by plain language limited to the policy must “reconcile the liberal federal question of whether an arbitration favoring agreements with the clause is enforceable where federal stat- important rights protected created and utorily provided rights are affected. rights legislation.” case, civil Id. federally protected this no interest federal omitted) (quotation (emphasis at 652-53 Stutters, through is at stake. The diver- added). end, jurisdiction, Toward Morrison sity seek to enforce contrac- provides “potential litigants rights must tual As a provided state law. result, given opportunity, prior Cooper simply arbi- Morrison and do merits, FAA, tration not apply. on the to demonstrate Under the the Stutters AND VENUE JURISDICTION available to contract defenses must look those found Kentucky rather than arise herein alleged 13. The common law. federal Protec- Consumer under the Tennessee § 47- Ann. TenmCode Act of Constructors, Inc., tion F.3d T.K Stutter statutory and 18-101, seq., and other et (6th Cir.2006). 343, 345-46 common law. of the com- allegations jurisdictional jurisdiction over has 14. This Court state: plaint at bar suf- BCBS-TN does because BCBS-TN DeWayne Darby, P. M.D. Plaintiffs Tennessee, has suffi- ficient business M.D., by their Zachary Rosenberg, Tennessee, minimum contacts with cient bring pursuant action attorneys, here, and other- including located offices Act Protection the Tennessee Consumer intentionally avails itself wise 47-18-101, § et Ann. TenmCode by establishing in Tennessee markets statutory and common seq., and other networks maintaining physician law, against BlueCross BlueShield plans healthcare administering Tennessee, Health Inc. and Tennessee Tennessee, of subscribers thousands Network, (collectively referred Inc. Care marketing, selling by promoting, “BCBS-TN”), allege to herein as services distributing its healthcare and be- following upon information state, to render the exercise in this so as lief, except paragraphs pertaining as to courts Tennessee jurisdiction actions, are al- own plaintiffs’ notions of under traditional permissible knowledge: leged upon personal justice. and substantial play fair proper is a venue

15. This Court § 16- pursuant to TenmCode this action INTRODUCTION 10-101, con- seq., because BCBS-TN et bring this action on their 1. Plaintiffs amount of its busi- a substantial ducts (the and on behalf of a class own behalf Tennessee, County, in Davidson ness “Class”) are mem- physicians of all who in physicians participating numerous has Associa- bers of the Tennessee Medical district, provides healthcare this (“TMA”) were, are, or tion and who to numerous and services products in participating physicians defendants’ Moreover, County residents. Davidson members”) (“TMA at physician network of the named it the chosen forum is April from during period time plaintiffs. (the 25, through present “Class 1996 a federal though Even Bradford Period”). bring this Plaintiffs do not case, as to the cost- it followed rights civil benefits. assignees action as of enrollees’ agree- in an arbitration provisions splitting Moreover, the action does not otherwise that was treatment the individualized ment under or other remedies seek benefits For reasons in Tree. determined Green Income Employment Retirement Se- Stutter, ap- is not in Morrison articulated (“ERISA”), the Fed- 1974 curity Act of Thus, trial at to the case bar. plicable Benefits Act Employee Health eral placed. is well reliance on court’s Bradford (“FEHBA”) Act of Medicare or the Darby clear- claims, Rosenberg and 1965, it arise under or relate nor does allegations, jurisdictional ly state acts. these statu- entirely upon Tennessee’s are based law. common

tory and 910 Rather, analysis, Eighth merely argues

In the final tion. Faber Circuit Appeals correctly Courts of has articulated requirement pay that he half of the requirements: Tree Green arbitrators’ fees unconscionable be- it pay cause is cost he would not A fee-splitting arrangement may be litigation discourages and therefore him specific unconscionable if information bringing from his claims. indicates that fees are Without circumstances evidence, however, specific hypo- cost-prohibitive preclude the vindi- discouragement is statutory rights purely specu- cation of in an arbitral thetical Tree, Tree, 90, 92, forum. See 531 at lative. See Green 531 at Green U.S. 373; 373; Blair, 148 L.Ed.2d Dob- 121 L.Ed.2d S.Ct. bins, 198 F.3d at 717. The burden of 283 F.3d at 610. showing that arbitrators’ fees will be Menard, Inc., Faber v. 367 F.3d cost-prohibitive party falls on the seek- (8th Cir.2004). 1053-54 Tree, ing to avoid arbitration. Green Except fee-splitting provisions for the 531 U.S. arbitration, the contract relative to all of L.Ed.2d 373. The Court has parties the issues between the in this case quantum proof not established what are foreshadowed if not foreclosed necessary to meet that burden. Id. We opinion Judge written for this Court require just hypothetical more than Chevrolet, Swiney Pyburn v. Bill Heard however, inability pay, overcome (Tenn.Ct.App.2001).2 S.W.3d policy favoring

the federal arbitration. Dobbins, See 198 F.3d at 716-17. The Pybum was an action based on the Ten- party seeking to avoid arbitration should nessee Consumer Protection Act and a present specific likely evidence of arbi- compel motion the Defendant to arbi- ability financial trators’ fees and its tration. The trial court held that the Fed- pay those fees so that the court can applied, eral Arbitration Act that Tennes- determine whether the arbitral forum is see Protection Act claims Consumer party. party accessible to the If the un- general were amenable to arbitration burden, does not meet its the district der the Federal Act and that the contract agree- court must honor the arbitration was not an unenforceable adhesion con- compel ment and arbitration. however, held, tract. The trial court particular agreement Faber failed to meet his burden of was not enforce- unavailability of proof that the arbitrators’ fees make the able because of the class injunctive or relief in the agreement unconscionable due to their action arbitral prohibitive cost. The amount of the arbi- forum and because the costs of arbitration potentially prohibitive in since Plain- trator’s fees is not well-defined the were contract, appeal, On this provided and Faber has not tiffs claims were so small. holding of necessary to estimate the Court reversed the trial court the evidence nonenforceability provi- of the arbitration and the corre- of the arbitration length trial fees sions and otherwise affirmed the sponding amount of arbitrators’ issues, It noted that at the time (e.g. sophistication average of the court. should be action certifica- daily hourly appeal, or arbitrator costs while class no provide sought, He has also failed to tion was there had been such region). particular by evidence of his financial situa- certification the trial court. by Pybum May publication recommended

2. decided this Court on was denied and was permission appeal 2001. Application for to Court on November 2001.

9H contracts, failures to argument of rejecting Plaintiff’s that breaches After unjust Act enrichment. promptly pay Consumer Protection and Tennessee Instead, of to a that provisions right plaintiffs argue barred his waiver a judicial forum, holding argu and that such individual claim arbitrating of each costs preempted by ment the Federal Arbi physician underpayment a re- of Corp. tration Act under Southland v. Keat claims are the imbursement which 1, 104 ing, 79 L.Ed.2d 465 U.S. acts that make wrongful deceptive (1984) 361), at 63 S.W.Bd this Court {See facts some of the up constitute question “Whether the costs addressed lawsuit, prohibi- of is cost evidence this arbitration render arbi associated with physicians do not have tive such that the tration This agreement unenforceable.” remedy to redress a viable forum or Tree and that Court followed Green held these small claims. Pyburn carry to his of had failed burden lays problem trial bare the The court

proof prohibitive relative to costs of arbi facing trying this case then left open tration. The Court prohibitive. that is cost prove question in the case presented at bar sought in fact to redress complaint If their might holding, “Our conclusion be different Darby, Rosenberg small claims Drs. agreement prohibited shifting had $4,000 pe- over a aggregated language these or contained some costs years, easy enough be riod of two it would responsible Plaintiff to be for all requiring that say very proof on limited arbitra- a disproportionate share of the costs of complaint, prohibitive. tion was cost arbitration, is not but the situation however, small claims but asserts no such here.” 63 S.W.3d alleges pattern improper rather law, insight controlling With this into we practices deceptive and business conduct complaint now specific address the in this deprived under which “defendants have case before and what record the Court millions of dollars of TMA members of discloses as to the cost arbitration ver- for healthcare ser- lawful reimbursement litigation. sus the cost of provided plan vices to defendant’s mem- clearly Pyburn Since holds portion This a small bers.” is but claims under the Tennessee Consumer a pray- which includes complaint extensive subject Protection Act are to arbitration fees, attorneys’ punitive damages, er for prohib that “to the extent TCPA injunc- expert permanent fees and witness its arbitration because it is an unlawful scope. very tive relief broad What right proceed waiver in a of Plaintiffs $4,000 claim might prohibitive when forum, judicial is preempted TCPA certainly prohibitive not be in issue would FAA.”, before the can the issues injunctive and vast when millions of dollars just readily be submitted arbitrators as It is actually relief are in issue. judicial they can be submitted meet that Plaintiffs failed to area forum. considers that proof. When one burden scope complaint

In the the addressing plaintiffs’ allegations the factual the complaint, trial court observed in its claims nothing the do with small but have 3, 2005 Order: liti- February major do and extensive much to it is costs of bar, gation, apparent In [plaintiffs] case at do not controversy resolving such will exten- specifically address the costs of arbitrat- of whether expensive regardless ing numer- sive alleging this case—a law suit The acts, judicial. con- deceptive the forum is arbitral or systematic ous and 912 provides, part

tract in issue “H. ALL DIS- tion clauses are of a contract of adhe- BE PUTES WILL SUBJECT TO BIND- sion and whether defendant’s substan- tial market share is a factor to be used in ING ARBITRATION.” Both Green Tree Pybum strong evaluating bargaining power reiterate the federal the relative policy favoring parties agreement. arbitration and cast the to an arbitration proof upon party seeking burden of court, relying primarily The trial on Bu agreement. invalidate the arbitration Eyring, raczynski v. 919 S.W.2d 314 S.W.3d at 363. The record before the (Tenn.1996), in held the contract issue attempt quantify Court contains no is not a contract of adhesion and that far-reaching costs of arbitration of the (20— alleged percent BCBST’s 20 to 40 alleged complaint. in the 40%) Tennessee market share is not a February The trial court held its evaluating factor to be used the relative pertinent part 2005 Order power parties. In bargaining of the these holdings, analysis we find the trial court’s 1 .... this lawsuit is not a small claim. Buraczynski to be correct. involved Ultimately, have not doctor/patient requiring contract arbitra presented court of evidence under malpractice dispute tion of a medical arbitrating the costs of the above- the Tennessee Arbitration Act. Su captioned lawsuit. preme under facts of that Court held court, therefore, 3. This concludes that case that the contract was a contract of plaintiff physicians have failed to However, further adhesion. the Court demonstrate that the costs of arbi- held: trating above-captioned lawsuit prohibitively expensive more than conclusion that the contracts Our judicial not, forum. were contacts of adhesion is howev- er, determinative of the contract’s en- granting Plaintiffs Motion for a Rule forceability. Enforceability generally Interlocutory Appeal, the trial court of the depends upon whether the terms

held: beyond ex- contract the reasonable very There is little law in Tennessee pectations ordinary person, op- of an developing interpreting the Green Broemmer, pressive unconscionable. Corp.-Ala. Randolph, Tree Financial will not en- 840 P.2d 1016. Courts 148 L.Ed.2d op- force adhesion contracts which are (2000) exception to arbitration pressive party or which to the weaker prohibitive. where the arbitration is cost liability obligations serve to limit the Because of this absence law Ten- stronger party. Id. alone, nessee and on that basis at 320. grants interlocutory appeal. S.W.2d correctly it This Court is convinced has The contracts at issue this case are case, applying decided this Green contracts, rather physician/patient but Tree Financial standard and cases from physi- practicing contracts between two jurisdictions. other major health maintenance or- cians and a agree We with the trial court as to this organi- ganization preferred provider issue. services provides zation which healthcare for its enrollees. interlocutory ap

In granting the bar, if we were to In the case at even peal, expanded we the issues so as adhe- the contracts to be contracts of of whether the arbitra- hold issues .include

913 forum, legisla nothing save federal judicial satisfy Burac- sion, such would Mo the tide of can stem tive intervention must test that such contracts zynski Mercury v. Hosp. Memorial H. Cone ses an expectations of “beyond the reasonable 927, 1, 74 Co., 460 103 S.Ct. Const. or uncon ordinary person, oppressive or (1983), v. Corp. Southland L.Ed.2d 765 pri The 919 at 320. scionable.” S.W.2d 79 465 U.S. Keating, Buraczynski mary upon relied case (1984), Interstate 1 v. L.Ed.2d Gilmer or un finding oppressive justifying 20, 111 S.Ct. Corp., 500 U.S. Johnson/Lane the contract character of conscionable (1991), 26 Allied-Bruce 114 L.Ed.2d Phoenix, v. Abortion Servs. Broemmer Dobson, 115 v. 513 U.S. Terminix Co. (1992), Ltd., Ariz. 840 P.2d 1013 173 (1995), 834, 130 L.Ed.2d 753 Green S.Ct. provisions in which the arbitration case Randolph, Corp.-Ala. v. Tree Financial in a clinic admission form were contained 79, 121 513, 148L.Ed.2d 373 531 U.S. to be required the arbitrators Chevrolet, (2000) Pyburn v. Bill Heard physicians specializing obstetrics The (Tenn.Ct.App.2001). 63 351 S.W.3d gynecology. superiority asserting law rule common in this case under Analyzing the record forum forum over an arbitral judicial Transpor Buraczynski Vickery and under history by the Federal swept was into ACO, Inc., tation, Inc. v. HEP 2004 WL forced Act. Parties cannot be Arbitration (Tenn.Ct.App.2004) Wilson they agree do not to arbitrate that which Pharmacy, Computer Inc. v. General Co., Inc. v. Frizzell Constr. to arbitrate. Corp., (Tenn.Ct.App. 2000 WL 1421561 (Tenn.1999), LLC, Gatlinburg, 9 S.W.3d 2000) “beyond the contracts at bar are not arbitrate, agree to parties but when the ordinary expectations the reasonable strongly favoring arbi policy federal person, oppressive or unconscionable” upon policy imposed tration which properly if market share is consid even all courts Southland overrides state analysis. trial ered as a factor The Pyburn, conflicting considerations. market correctly court held that neither at 357. S.W.3d that the contract argument share nor an in all trial court is judgment The coupled oppres was one of adhesion affirmed, assessed and costs are respects and unconscionable factors can with sive Appellants. Buraczynski analysis. stand M.S., KOCH, JR., P.J., WILLIAM C. Conclusion separate concurring opinion. filed years ago, than the Federal More JR., P.J., M.S., KOCH, C. WILLIAM reversed the com- Arbitration Act concurring. upon arbitra- mon law rule that frowned conclusion that I concur with the court’s Subsequent case law over those tion. have not demonstrated party plaintiffs A eight decades favors arbitration. Provider in the of a Commercial challenging provisions the arbitration requiring Manual them contract, provi- those Administration particularly when for one-half of the fees unambiguous, responsible faces a be sions are clear and conducting law, directly related to expenses federal tsunami of case both figurative arbitrating their state, and reen- arbitration renders strengthening ever have expensive. prohibitively of arbitration. forcing the favored status point, Green proof on may long for the burden Although lawyers judges Randolph, 531 U.S. Corp.-Ala. of combat a Tree Fin. nostalgic challenges 79, 92, 513, 522, 148 L.Ed.2d 373

(2000), they and thus must demonstrate it prohibitively -willbe expensive for to pursue

them their claims in the arbitral

forum. plaintiffs’ claims for relief in this go beyond

case far disputes specific over

charges particular patients.1 They have

presented no evidence that it will be more

expensive to arbitrate their claims than it litigate

would be to them. See v. Bradford Inc., Sys.,

Rockwell Semiconductor (4th Cir.2001);

F.3d In re Curren-

cy Litig., Conversion Fee Antitrust (S.D.N.Y.2003).

F.Supp.2d In the evidence,

absence of this sort of the trial properly

court declined to invalidate the provision.

Hal GERBER

Robert R. HOLCOMB. Tennessee, Appeals

Court of

at Nashville.

Oct. 2006 Session.

Dec.

Published Pursuant to Rule Appeals.

Tennessee Court of light procedural posture may 1. In of this seek class action relief under the Tennes- case, upon Nothing we have not been called to address see Consumer Protection Act. opinion whether the Tennessee Consumer Protection court's should be construed as con- applies relationship cluding plaintiffs Act to the contractual be- that the have a claim stated relief, plaintiffs individually representatives tween the and BlueCross BlueShield or as class, of Tennessee Tennessee Health Care Net- under the Tennessee Consumer Pro- work, or, does, if it Inc. whether the tection Act.

Case Details

Case Name: Rosenberg v. BlueCross BlueShield of Tennessee, Inc.

Court Name: Court of Appeals of Tennessee

Date Published: Nov 29, 2006

Citation: 219 S.W.3d 892

Docket Number: M2005-01070-COA-R9-CV

Court Abbreviation: Tenn. Ct. App.