Health Care: Equitable Estoppel

By Zuckerman, Susan C. | Dispute Resolution Journal, May-July 2002 | Go to article overview

Health Care: Equitable Estoppel


Zuckerman, Susan C., Dispute Resolution Journal


The Court of Appeals for the 11 th Circuit held that allegations of a conspiracy in violation of the Racketeer Influenced and Corrupt Organizations Act were not "intimately founded in and intertwined with" the obligations in the underling contract containing an arbitration clause. Thus, the nonsignatory defendants could not use the doctrine of equitable estoppel to compel plaintiffs who were signatories to that contract to arbitrate.

A group of doctors, acting on their own behalf and on behalf of others similarly situated, sued several health maintenance organizations in federal district court in Florida. They asserted claims alleging violations of RICO, ERISA, federal clean payment regulations, state prompt-pay statutes, as well as claims of quantum meruit and unjust enrichment. Some of the doctors had contracts with some of the HMOs, and some of those contracts had arbitration clauses. The HMOs moved to compel arbitration of the doctors' claims. The district partially granted and partially denied this motion.

The district court held that the arbitration clauses were enforceable between the parties that signed them, except that the arbitration clauses that excluded punitive damages were not enforceable because they precluded recovery of treble damages under RICO. Thus, the HMOs could not compel arbitration of RICO claims. The district court also held that an HMO could not invoke the arbitration clause to compel arbitration of aiding-and-abetting charges regarding a doctor's contractual rights with another HMO. …

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