United States District Court, D. New Mexico
BORDER AREA MENTAL HEALTH, INC., COUNSELING ASSOCIATES, INC., EASTER SEALS EL MIRADOR, FAMILIES & YOUTH, INC., HOGARES, INC., SOUTHWEST COUNSELING CENTER, INC., SOUTHERN NEW MEXICO HUMAN DEVELOPMENT, INC., TEAMBUILDERS COUNSELING SERVICES, INC., THE COUNSELING CENTER, INC., and VALENCIA COUNSELING, INC., Plaintiffs,
UNITED BEHAVIORAL HEALTH, INC. and UNITED HEALTHCARE INSURANCE COMPANY, INC., d/b/a OPTUMHEALTH NEW MEXICO, PUBLIC CONSULTING GROUP, INC., ELIZABETH A. MARTIN, ANDREW SEKEL, TIMOTHY S. MILLER, and JOHN DOES 1-10, Defendants.
MEMORANDUM OPINION AND ORDER
VÁZQUEZ, UNITED STATES DISTRICT JUDGE
MATTER comes before the Court on Plaintiffs' Motion to
Set Aside the Opinion of the Arbitrator [Doc. 60]. The Court,
having considered the motion, briefs, and relevant law, and
being otherwise fully informed, finds that the Motion is not
well-taken and will be denied.
New Mexico “(“OHNM”) is a joint venture
that was formed by United Behaviorial Health, Inc. and United
Healthcare Insurance Company, Inc. Doc. 6-1 at ¶ 3. In
2009, OHNM entered into a “Statewide Contract”
with the New Mexico Inter-Agency Behavioral Health Purchasing
Collaborative (the “Collaborative”) to manage New
Mexico's Medicaid and state-funded programs. Id.
at ¶ 4. Pursuant to the Statewide Contract, from 2009
through December 31, 2013, OHNM served as the
“Statewide Entity” to administer the delivery of
behavioral health services to individuals enrolled in and
eligible to receive services under the Collaborative's
agency programs. Id.
turn, in its capacity as the Statewide Entity, OHNM entered
into contracts with numerous healthcare providers, including
Plaintiffs, to provide the necessary behavioral health and/or
substance abuse health care services to the individual
enrollees. Id. at ¶ 5. Each of the
“Provider Agreements” and “Facility
Participation Agreements” between Plaintiffs and OHNM
includes an arbitration provision, which states in relevant
part that, in the event the parties were unable to resolve
“any disputes about their business relationship,
” those disputes would be “submitted to binding
arbitration in accordance with the rules of the American
Arbitration Association (“AAA”). Doc. 61, Ex. 1
at Art. 30; Doc. 6-1, Ex. 2 at Section 8.
allege that OHNM mismanaged its Statewide Contract and, in
order to cover up its mismanagement, accused its healthcare
providers, including Plaintiffs, of engaging in institutional
fraud. Doc. 1-1 at ¶¶ 36, 43. Plaintiffs further
allege that OHNM audited Plaintiffs with the predetermined
outcome of finding “credible allegations of fraud,
” in order to trigger the suspension of payments to
Plaintiffs for the healthcare services that they had provided
pursuant to their contracts with OHNM. Id. at
¶¶ 52-55. As a result, Plaintiffs allege, they are
owed payments totaling $11.5 million. Id. at ¶
on these allegations, Plaintiffs commenced the instant action
in the First Judicial District Court of New Mexico, Santa Fe
County, on June 23, 2016, against United Behavioral Health
and United Healthcare Insurance Company, doing business as
OHNM, Elizabeth Martin, Chief Executive Officer of OHNM,
Andrew Sekel, Chief Executive Officer of OptumHealth
Behavioral Solutions, and Timothy S. Miller, regional manager
for OHNM, collectively referred to as the “United
Defendants, ” in addition to the Public Consulting
Group, the entity that was hired to conduct the audits of
Plaintiffs. Doc. 1-1. On November 3, 2016, United Defendants
removed the action to this Court. Doc. 1. In their Complaint,
Plaintiffs allege claims against United Defendants for
interference with contractual relations, prima facie tort,
civil conspiracy to commit interference with contractual
relations and prima facie tort, and violations of the New
Mexico Unfair Practices Act. Doc. 1-1 at ¶¶ 67-89.
November 18, 2016, United Defendants filed a motion to compel
Plaintiffs to arbitrate the claims alleged against them. Doc.
6. In support of their motion, United Defendants argued that
the agreements into which each Plaintiff had entered
contained valid and binding arbitration provisions, and that
Plaintiffs' claims fell directly within the scope of
those provisions. Id. Plaintiffs did not dispute
that they entered into valid arbitration agreements, but
opposed United Defendants' motion to compel on the basis
that their claims did not bear a reasonable relationship to
the subject matter of the arbitration agreements and thus did
not fall within the scope of those agreements. Doc. 29 at
4-10; Doc. 30 at 3-10.
Memorandum Opinion and Order entered March 28, 2018, the
Court granted United Defendants' motion to compel,
explaining that, by incorporating the AAA Rules into the
arbitration provisions set forth in the relevant agreements,
Plaintiffs and United Defendants “clearly and
unmistakably” agreed to arbitrate arbitrability. Doc.
46. Accordingly, the Court further explained, all questions
of arbitrability - including the questions Plaintiffs raised
as to whether their claims reasonably relate to the subject
matter of the parties' agreements to arbitrate - must be
resolved by an arbitrator. Id. Under controlling
Tenth Circuit precedent, the Court found that it had no
discretion to decide whether Plaintiffs' claims were
outside the scope of the arbitration provisions in the
relevant agreements, but rather was obligated to defer that
determination to the arbitrator. Id. Accordingly,
the Court found no basis to deny United Defendants'
motion compelling arbitration of Plaintiffs' claims
against it. Id.
11, 2018, Plaintiffs initiated an arbitration proceeding with
the AAA, and requested that the Arbitrator declare that their
claims against United Defendants are not subject to
arbitration. The Arbitrator, Judge Bruce. D. Black (Retired),
ordered the parties to submit briefing on the threshold issue
of arbitrability. Thereafter, on December 5, 2018, the
Arbitrator issued his Opinion on Arbitrability. Doc. 60-4.
The Arbitrator determined that the claims asserted by
Plaintiffs against United Defendants fall within the scope of
the arbitration provision in the relevant agreements, and
thus must be pursued solely through binding arbitration.
Id. On the instant motion, Plaintiffs request that
this Court “vacate the Arbitrator's decision and
allow the parties to litigate, in this Court, ”
Plaintiffs' claims against United Defendants. Doc. 60 at
3. United Defendants oppose this request.
There is No. Basis to Set Aside the Arbitrator's
review of arbitration  decisions is extremely limited;
indeed, it has been described as ‘among the narrowest
known to law.'” Dominion Video Satellite, Inc.
v. Echostar Satellite, L.L.C., 430 F.3d 1269, 1275 (10th
Cir. 2005) (quoting Bowen v. Amoco Pipeline Co., 254
F.3d 925, 932 (10th Cir. 2001)). Under Section 10 of the
Federal Arbitration Act (“FAA”), “vacation
of an arbitration award is only proper in a few instances
that include fraud, corruption, arbitrator misconduct
[including the refusal to hear evidence pertinent and
material to the controversy], and arbitrator
overreach.” Dominion Video, 430 F.3d at 1275
(quoting Bowen, 254 F.3d at 932); 9 U.S.C.§ 10.
“Various courts have determined that vacation is also
appropriate when the arbitration award violates public
policy, when the arbitrator did not conduct a fundamentally
fair hearing, or when an arbitrator's decision is
‘based on an “manifest disregard” of the
law, defined as “willful inattentiveness to the
governing law.'” Dish Network, L.L.C. v.
Ray, 900 F.3d 1240, 1243 (10th Cir. 2018) (quoting
Chevron Mining Inc. v. United Mine Workers of Am., Local
1307, 648 F.3d 1151, 1154 (10th Cir. 2011)). Mere
“errors in either the arbitrator's factual findings
or his interpretation of the law ...