CA COURTS: Ruling Is “Victory” for Consumers and HMOs
The California Supreme Court -- in a "first of its kind" ruling - - determined that patients can turn to the courts when seeking a "ban on false advertising and other deceptive practices by an HMO," rather than relying on one or more arbitrators (Egelko, AP/San Diego Union-Tribune, 12/3). In the court's opinion, Justice Stanley Mosk wrote that cases where plaintiffs seek a court injunction to halt "future deceptive practices on behalf of the general public," must be presented to a trial jury and judge, rather than an arbitrator (Dolan, Los Angeles Times, 12/3). He added, "Publicly accountable judges ... are the most appropriate overseers of injunctive remedies explicitly designed for public protection." Dissenting Justice Ming Chin argued, however, the outcome "violates federal arbitration laws" and displays "judicial hostility toward arbitration." But the new law, effective Jan. 1, was hailed by both trial attorneys and consumer groups as a "victory" (AP/San Diego Union-Tribune, 12/3). Legal representatives for the defendant, Cigna Healthplans of California, were "pleased" that financial settlements remain determined by arbitrators, stopping a "backdoor way" around binding arbitration clauses. Cigna representatives added that arbitration presents a "fair, cost-effective alternative to the trial court system." Prosecuting attorney Christopher Angelo was "ecstatic" with the ruling, saying that "Now managed care will be required to follow California law and if they don't, there will be an injunction issued ordering them to follow it" (Los Angeles Times, 12/3). He says that the ruling "gives Californians new rights against 'any member of big business that has a predatory, unethical business practice'" (AP/San Diego Union-Times, 12/3). Consumer activist Jamie Court also applauded the decision, calling it a "big victory for the public interest," adding that "HMOs are going to have their dirty laundry aired in public" as "society's business is not going to be done behind the closed doors of an arbitrator's office" (Los Angeles Times, 12/3).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.