Court Opinion

ID: 6500820
Source: CourtListenerOpinion
Date Created: 2022-07-18 20:01:00.63143+00
Date Added: 2024-06-11T09:22:28.493651
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        JUL 18 2022
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

BOARD OF TRUSTEES OF THE IBEW                   No.    21-16424
LOCAL NO. 640 AND ARIZONA
CHAPTER NECA HEALTH AND                         D.C. No. 2:20-cv-01260-MTL
WELFARE TRUST FUND, as fiduciary of
its welfare plan,
                                                MEMORANDUM*
                Plaintiff-Appellant,

 v.

CIGNA HEALTH AND LIFE INSURANCE
COMPANY,

                Defendant-Appellee.

                   Appeal from the United States District Court
                            for the District of Arizona
                   Michael T. Liburdi, District Judge, Presiding

                        Argued and Submitted July 7, 2022
                                Honolulu, Hawaii

Before: WARDLAW, NGUYEN, and OWENS, Circuit Judges.

      The Board of Trustees (“Board”) of the IBEW Local No. 640 and Arizona

Chapter NECA Health and Welfare Trust Fund (“Fund”) appeals the district

court’s order compelling arbitration and dismissing the Board’s lawsuit against

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Cigna Health and Life Insurance Company. We have jurisdiction under 9 U.S.C.

§ 16(a)(3) and 28 U.S.C. § 1291. Reviewing de novo, see Munro v. Univ. of S.

Cal., 896 F.3d 1088, 1091 (9th Cir. 2018), we affirm.

      Under the Federal Arbitration Act, 9 U.S.C. §§ 1–16, the district court’s role

is limited to “determining whether a valid arbitration agreement exists and, if so,

whether the agreement encompasses the dispute at issue.” Berman v. Freedom

Fin. Network, LLC, 30 F.4th 849, 855 (9th Cir. 2022) (quoting Lifescan, Inc. v.

Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004)).

      1. The district court correctly determined that the ERISA plan at issue,1

even if separate from the Fund, is equitably bound by the Fund’s agreement to

arbitrate under the principle of direct benefits estoppel. Under Arizona law, a

nonsignatory to an agreement containing an arbitration provision may be

compelled to arbitrate if the nonsignatory “asserts claims that must be determined

by reference to the agreement.” Benson v. Casa De Capri Enters., LLC, 502 P.3d

461, 464 (Ariz. 2022) (quoting Austin v. Austin, 348 P.3d 897, 906 (Ariz. Ct. App.

2015)).

      1
         The Board asserts claims against Cigna under the Employee Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001–1461. The Board
allegedly brings these claims in its capacity as the named ERISA plan fiduciary
rather than the Fund’s fiduciary.

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      The Board alleges that Cigna “concocted a scheme to secretly obtain more

compensation than it was entitled to” and “charged excessive fees to the Plan.”

Determining what compensation Cigna was “entitled to” or whether its fees were

“excessive” is impossible without reference to the Administrative Services Only

(“ASO”) Agreement, which specifies the fees that Cigna may charge. Cf. Austin,

348 P.3d at 906 (declining to apply direct benefits estoppel when claims only “may

require reference to the . . . agreement”). The district court properly rejected the

Board’s representations that it would not need to rely on the ASO Agreement to

prevail at trial. See id. (instructing courts to “look past the labels the parties attach

to their claims to the underlying factual allegations” (quoting Reid v. Doe Run Res.

Corp., 701 F.3d 840, 848 (8th Cir. 2012))).

      2. The district court also correctly determined that the arbitration provision

in the ASO Agreement encompasses the parties’ dispute. The provision is

dissimilar to that in CardioNet, Inc. v. Cigna Health Corp., 751 F.3d 165 (3d Cir.

2014), on which the Board relies, because it applies to “any” dispute “arising from

or relating to” the agreement’s performance or interpretation. See Cape Flattery

Ltd. v. Titan Mar., LLC, 647 F.3d 914, 922 (9th Cir. 2011) (explaining that the use

of both “arising out of” and “relating to” indicates that the “parties intend[ed] to

include a broad arbitration provision”); cf. CardioNet, 751 F.3d at 174 (finding

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provision narrow because it “require[d] arbitration not of ‘all’ or ‘any’ disputes

between the parties, but of only ‘the dispute’”).

      AFFIRMED.

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