Opinion ID: 6491398
Heading Depth: 3
Heading Rank: 2

Heading: The Motion to Compel Arbitration, the Motion for Judgment on the Pleadings, and the Motion for a Protective Order

Text: On November 20, 2002, the physician-plaintiffs served document requests and interrogatories on HMSA, purportedly in response to HMSA’s stated intention to file a motion to compel arbitration. In essence, the request called for the production of all documents “which were generated, referred] or relatefd] to the period from August 8, 1996 to the present” concerning: 1. The total number of claims and denials of claims, claims submitted to the administrative appeals process and claims submitted to arbitration; 2. Appeals made pursuant to the [administrative appeal process, including documents concerning: (a) the nature of the appeal; (b) the response to the appeal; and (c) the disposition of the appeal; 3. Grievances and appeals that were submitted to arbitration, including documents concerning the transcript(s) of the arbitration, the outcome, and the names of the arbitrators; 4. The contracting physicians’ costs associated with bringing claims pursuant to the procedures described in the arbitration clause and the average amount of the disputed claims; 5. The qualifications of the individuals involved in the administrative appeals and arbitration process; 6. Any negotiations between HMSA and contracting physicians where HMSA has agreed to modify the language or terms of the arbitration clause based on these negotiations; and 7. Information concerning complaints and grievances submitted to defendant, including information concerning defendant’s determination to include or exclude certain terms or items from arbitration. The request for interrogatories sought similar information, i.e., documents and other information from “August 8,1996 to the present” regarding physician complaints, grievances, inquiries, claim submission, pre-certifi-cation requests, appeals, arbitrations, and contract negotiations involving HMSA and any of its participating physicians. On December 23, 2002, HMSA moved to compel individual arbitration pursuant to the PAR Agreement and to dismiss or, in this alternative, to stay all proceedings. On the same day, HMSA also filed a motion fo.: judgment on the pleadings, arguing that ’ the pleadings conclusively establish that: (1) [the physician-p]laintiffs have failed to plead that they have exhausted administrative remedies as required under their agreements with HMSA, but even if they have so pleaded, they would have no standing^] (2) [the physieian-p]laintiffs’ claims under HRS [c]hapter 480 [dealing with unfair and deceptive practices, and unfair methods of competition] are barred [inasmuch as they are not “consumers” as required for relief under Chapter 480 and their claims do not involve “competition”]; (3) [the physieian-p]laintiffs’ claims [of] unjust enrichment are defective as a matter of law [because unjust enrichment is an action in quasi-contract and there is a valid and express contract here]; and (4) [the physician-p]laintiffs claims [of] tortious interference with prospective economic advantage are also barred as a matter of law [because they have not shown the existence of a contract or potential contract between them and a specific third-party]. HMSA also sought a protective order against' the physician-plaintiffs’ discovery efforts, arguing that much of the discovery requests are irrelevant to the physician-plaintiffs’ individual situations and, particularly, irrelevant to its motion to compel arbitration and motion for judgment on the pleadings. HMSA maintained that the protective order “is necessary to protect HMSA’s right to an arbitral forum[ ] and to protect HMSA from undue burden, expense, annoyance and oppression.” On February 4, 2003, the physician-plaintiffs filed their opposition to HMSA’s motion to compel arbitration. They maintained that (1) the arbitration clause is unconscionable because HMSA forced the physicians to accept the arbitration clause on a “take it or leave it” basis, without providing a real choice or any opportunity to negotiate the terms and (2) their claims do not fall within the scope .of the arbitration clause. On the next day, February 5, 2003, the physician-plaintiffs filed their opposition to HMSA’s motion for judgment on the pleadings. Therein, they maintained, inter alia, that they have stated a claim: (1) under HRS chapter 480 by alleging that HMSA has engaged in a number of systemic unfair and deceptive acts and practices; (2) of tortious interference with prospective economic advantage by alleging that HMSA’s conduct was intentional and malicious and that such conduct has disrupted their relationship with their patients in a manner that has imposed financial hardships upon them; and (3) of unjust enrichment as an alternative claim for relief should the court find the PAR. Agreement invalid and unenforceable. On the same day, the physician-plaintiffs filed an expedited motion to compel discovery in response to HMSA’s failure to answer their discovery requests and moved to have their discovery motion heard before the motion to compel arbitration. Specifically, the physician-plaintiffs asserted that the discovery requests were “narrowly-tailored and' necessary to demonstrate that the [arbitration [cjlause at issue is an unenforceable contract of adhesion.” Both of these motions were summarily denied. On April 10, 2003, the circuit court heard oral argument on the parties’ remaining motions (in conjunction with HMSA’s motion for judgment on the pleadings in the HMA Appeal). As previously stated, the circuit court took the motions under advisement and, ultimately, entered its order on May 23, 2003, granting HMSA’s motions to compel, for entry of protective order, and for judgment on the pleadings, over the physician-plaintiffs’ objection. Therein, the circuit court: (1) denied the physician-plaintiffs’ discovery requests and granted HMSA’s protective order inasmuch as it deemed the requests to be irrelevant, overbroad, and burdensome; (2) found that (a) the arbitration clause was valid and enforceable, (b) physician-plaintiffs’ claims of uneonscionability did not provide a legal basis for invalidation, and (e) the physician-plaintiffs “are required to resolve their disputes outside of [e]ourt, first by administrative appeal and then by binding arbitration,” as required by the dispute resolution provision; and (3) granted HMSA’s motion to compel arbitration, stating that, any claims which survive HMSA’s Motion for Judgment [on the Pleadings] and for which [the physician-p]laintiffs timely filed and exhausted their administrative appeal, and thereafter timely filed a demand for arbitration, shall be resolved by individual binding arbitration, not litigation, in accord with the terms of Article VIII of the PAR Agreements. Consolidation or class action of parties in arbitration shall not be permitted^] Although the court indicated that “all further proceedings in this action are hereby stayed,” it dismissed the physician-plaintiffs’ claims for failure to comply with the required dispute resolution procedures and granted HMSA’s motion for judgment on the pleadings. 11 With respect to its grant of judgment on the pleadings, the circuit court specifically determined that the physician-plaintiffs (1) had failed to comply with the requisite nonjudicial remedies in the dispute resolution provision, (2) did not have a claim of unfair methods of competition based on HSMA’s alleged wrongful conduct prior to June 28, 2002 (the date on which HRS § 480-2 was amended to permit a private right of action) and, as to any alleged wrongful conduct after June 28, 2002, the physician-plaintiffs’ claims did not involve claims of “competition,” 12 and (3) had not stated a claim of tortious interference with prospective economic advantage inasmuch as they identified no contract, potential contract, or third party. 13 A separate final judgment in favor of HSMA was entered on June 6, 2003 in the Cooper Appeal case. The physician-plaintiffs timely filed their notice of appeal on June 26, 2003.