“Confirmed Judges, Confirmed Fears” is a blog series documenting the harmful impact of President Trump’s judges on Americans’ rights and liberties. Cases in the series can be found by issue and by judge at this link
Trump Sixth Circuit Judge Eric Murphy cast the deciding vote to reverse a district court that ruled, in accordance with a decision by the American Arbitration Association (AAA), that a health care-related class action against a corporation should not be arbitrated and should proceed in federal court. The majority required that the complaint again be submitted for arbitration, in accord with the corporation’s wishes, in its June 2021 decision was in Ciccio v. SmileDirectClub LLC.
On behalf of a class of other consumers and dentists, Dr. Joseph Ciccio, Dana Johnson and others filed a federal suit against SmileDirect Club, contending that the corporation had committed false advertising and other misleading business practices in selling dental aligners over the internet. In accordance with a prior written agreement and an order by the district court, Johnson submitted the dispute to the AAA for resolution through arbitration. The AAA then informed the parties, however, that according to its Healthcare Due Process Protocol, the dispute could be arbitrated only if the parties agreed to arbitration “after the dispute arises.”
Johnson declined to so agree and brought the case back to the district court, which agreed that Johnson complied with the prior arbitration agreement and rejected the corporation’s effort to send the case back to arbitration again. SmileDirect appealed.
In a 2-1 decision in which Trump judge Murphy was the deciding vote, the Sixth Circuit reversed and ruled that the complaint must again be submitted for arbitration. According to the majority, an individual arbitrator, not the AAA itself or the district court, “should have decided whether” the claims should be arbitrated under the parties’ prior agreement. The majority maintained that there was “clear and unmistakable evidence” in the prior agreement that the “arbitrator shall have the power to rule on his or her own jurisdiction.”
Judge Eric Clay firmly dissented. He explained that the AAA rules, including its Healthcare Due Process Protocol, were “incorporated into the agreement” between the corporation and the other parties and “governed when the parties would be required” to arbitrate. The majority’s ruling, he went on, “severs an essential term” of the agreement by ignoring the Protocol and “therefore runs afoul of the agreement itself.” The agreement contained truly “clear and unmistakable evidence,” Clay continued, that the parties incorporated and agreed to AAA “consumer protocols that ensure a fair process in healthcare disputes” by requiring that parties agree again to arbitration after such disputes arise. The majority’s ruling, Clay pointedly noted, chose to “ignore” those rules “because they would not provide for the outcome desired by SmileDirect, rather than what the parties agreed to.”
As a result of Trump judge Murphy’s deciding vote, therefore, the consumer complaint against SmileDirect corporation will be sent to arbitration as the corporation wanted, even though that violates AAA fairness rules made part of the initial agreement itself. This “dangerous proposition,” as Judge Clay put it, could also harm consumers with other health care-related complaints against corporations. The case reinforces the importance, as part of our fight for our courts, of promptly confirming Biden judges who can help counteract such pro-corporation bias by Trump judges.