Pacificare Health Systems v. Book
A group of doctors sued several HMOs on various grounds, including the Racketeer Influenced Corrupt Organizations Act (RICO). Some, but not all, of the plaintiff doctors had contracts with the HMOs, some of which contracts had arbitration clauses that placed limitations on the sort of damages an arbitrator may award. The signatory and non-signatory HMOs moved to compel arbitration of all claims. The district court ruled in partthat an HMO could not compel arbitration of a RICO suit under an arbitration clause that excluded punitive damages. The court of appeals affirmed, concluding that arbitration clauses that precluded recovery of treble damages were not enforceable in a RICO suit.
Question Presented:
Whether a district court must compel arbitration of a plaintiff’s RICO claims under a valid arbitration agreement even if that agreement does not allow an arbitrator to award punitive
damages, leaving to the arbitrator in the first instance the decision of what remedies are available to the RICO plaintiff in arbitration.
