Submitted: April 6, 2017
from United States District Court for the Southern District
of Iowa - Des Moines
SMITH, Chief Judge, SHEPHERD, Circuit Judge, and FENNER,
SHEPHERD, Circuit Judge.
case presents a question of first impression in this circuit:
whether a court or an arbitrator should determine whether an
arbitration agreement authorizes class arbitration. After
reviewing relevant Supreme Court precedent and the opinions
of our sister circuits, we hold that a court must decide the
question because of the fundamental differences between
bilateral and class arbitration.
Corp. operates as a pharmacy benefit manager. It
contracts with entities that sponsor, administer, or
otherwise participate in prescription drug benefit plans.
Among the services Catamaran provides is reimbursing
pharmacies who furnish prescription drugs to individuals
covered by such a plan. The defendants in this case are four
pharmacies who have agreements with Catamaran for
are two relevant agreements here. One agreement was with SXC
Health Solutions Corp., a predecessor in interest to
Catamaran. The other agreement was with Catalyst Health
Solutions, Inc., also a predecessor in interest to Catamaran.
Each of the four pharmacies were parties to these agreements,
which were brokered on their behalf by AccessHealth, a
pharmacy services administration organization comprised of
some 85 independent pharmacies. AccessHealth acted as the
attorney-in-fact for the pharmacies in these two agreements.
Agreement contains an arbitration provision stating that if
"any disputes arising during the term of this
Agreement" cannot be resolved informally, then
"either party may submit the dispute to binding
arbitration in accordance with the Rules for the Conduct of
Arbitration of the American Arbitration Association [AAA] . .
. in effect at the date of commencement of such
arbitration." The Catalyst Agreement contains a similar
provision: "Any controversy or claim arising out of or
relating to this Agreement shall be settled by arbitration in
accordance with the applicable rules of the [AAA]."
Neither agreement uses the word "class" or refers
to class arbitration. The AAA Supplementary Rules for Class
Arbitration permit class arbitration and give arbitrators the
power to decide whether an agreement contemplates class
a dispute arose between Catamaran and the four pharmacies.
The pharmacies filed a demand for class arbitration with the
AAA, asserting claims on behalf of themselves and similarly
situated independent pharmacies-a class of over 85
responded by filing a declaratory judgment action under 28
U.S.C. § 2201 and the Federal Arbitration Act (FAA) in
the district court. Catamaran sought declaratory relief and
an injunction preventing the pharmacies from proceeding with
class arbitration. Catamaran then moved for summary judgment,
arguing that the relevant agreements do not permit the
pharmacies to proceed to arbitration as a class. Rather,
Catamaran contends that each pharmacy must engage Catamaran
in bilateral arbitration proceedings.
oral arguments, the district court denied Catamaran's
motion for summary judgment. The court viewed the issue
before it as twofold: (1) whether the availability of class
arbitration is a substantive or a procedural question; and
(2) whether the agreements clearly and unmistakably commit
the class arbitration question to an arbitrator. On the first
question, the court recognized that the Eighth Circuit has
yet to offer an answer. The court surveyed case law from
around the country but ultimately did not make any
determination on this question. Instead, the court answered
the second question in the affirmative. Relying on Eighth
Circuit precedent analyzing bilateral arbitration, the court
held that the agreements' reference to the AAA rules was
a clear and unmistakable commitment for an arbitrator to
decide whether the agreements contemplate class arbitration.
review de novo a district court's order on a motion for
summary judgment. See Lamoureux v. MPSC, Inc., ...