PacifiCare Health Systems, Inc. v. BookAnnotate this Case
538 U.S. 401 (2003)
OCTOBER TERM, 2002
PACIFICARE HEALTH SYSTEMS, INC., ET AL. v.
BOOK ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
No. 02-215. Argued February 24, 2003-Decided April 7, 2003
Respondent physicians filed suit alleging that managed-health-care organizations, including petitioners, violated, inter alia, the Racketeer Influenced and Corrupt Organizations Act (RICO) by failing to reimburse them for health-care services that they had provided to patients covered by the organizations' plans. Petitioners moved to compel arbitration. The District Court refused to compel arbitration of the RICO claims on the ground that the arbitration clauses in the parties' agreements prohibited awards of "punitive damages," and hence an arbitrator lacked authority to award treble damages under RICO. Accordingly, the court deemed the arbitration agreements unenforceable with respect to those claims. The Eleventh Circuit affirmed.
Held: It is unclear whether the agreements actually prevent an arbitrator from awarding treble damages under RICO. This Court's cases have placed different statutory treble damages provisions on different points along the spectrum between purely compensatory and strictly punitive awards. In particular, the Court has repeatedly acknowledged that RICO's treble-damages provision is remedial in nature, and it is not clear that the parties intended the term "punitive" to encompass claims for treble damages under RICO. Since the Court does not know how the arbitrator will construe the remedial limitations, the questions whether they render the parties' agreement unenforceable and whether it is for courts or arbitrators to decide enforceability in the first instance are unusually abstract. It would be premature for the Court to address them; the proper course is to compel arbitration. Pp. 403-407.
285 F.3d 971, reversed and remanded.
SCALIA, J., delivered the opinion of the Court, in which all other Members joined, except THOMAS, J., who took no part in the consideration or decision of the case.
William E. Grauer argued the cause for petitioners.
With him on the briefs were Christopher R. J. Pace, James W Quinn, Jeffrey S. Klein, Edward Soto, and Gregory S. Coleman.
Joe R. Whatley, Jr., argued the cause for respondents.
With him on the brief were Charlene P. Ford and James B. Tilghman, Jr. *
JUSTICE SCALIA delivered the opinion of the Court.
In this case, we are asked to decide whether respondents can be compelled to arbitrate claims arising under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U. S. C. § 1961 et seq., notwithstanding the fact that the parties' arbitration agreements may be construed to limit the arbitrator's authority to award damages under that statute.
Respondents are members of a group of physicians who filed suit against managed-health-care organizations including petitioners PacifiC are Health Systems, Inc., and PacifiCare Operations, Inc. (collectively, PacifiCare), and UnitedHealthcare, Inc., and UnitedHealth Group Inc. (collectively, United). These physicians alleged that the defendants unlawfully failed to reimburse them for health-care services that they had provided to patients covered by defendants' health plans. They brought causes of action under RICO, the Employee Retirement Income Security Act of 1974 (ERISA), and federal and state prompt-pay statutes, as well as claims for breach of contract, unjust enrichment, and in
*Briefs of amici curiae urging reversal were filed for the Chamber of Commerce of the United States by Evan M. Tager, Miriam R. Nemetz, and Robin S. Conrad; for the National Association of Manufacturers et al. by Miguel A. Estrada, Andrew S. Tulumello, Jan S. Amundson, Quentin Riegel, and Stephanie Kanwit; and for the Washington Legal Foundation by Christopher Landau, Ashley C. Parrish, Daniel J. Popeo, and Richard A. Samp.
Briefs of amici curiae urging affirmance were filed for the National Association of Consumer Advocates by Craig Jordan; for Public Citizen, Inc., by Scott L. Nelson and Brian Wolfman; and for Trial Lawyers for Public Justice by F. Paul Bland, Jr.