Petitioners Brief — PacifiCare Health Systems, Inc. v. Book

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Supreme Court of the United States

PACIFICARE HEALTH SYSTEMS, INC., et al.,

Petitioners.

JEFFREY BOOK, D.O., et ai.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Eleventh Circuit

PETITIONERS’ BRIEF

WILLIAM E. GRAUER*

CHRISTOPHER R. J. PACE

JAMES W. QUINN

JEFFREY S. KLEIN

COOLEY GODWARD LLP EDWARD SOTO

4401 Eastgate Mall GREGORY S. COLEMAN **

San Diego, CA 92121 WEIL, GOTSHAL & MANGES LLP

(858) 550-6000 767 Fifth Avenue

* Counsel of Record camsaniaaee wea

for PacifiCare Health .

Systems, Inc., and PacifiCare ** Counsel of Record for

Operations, Inc. UnitedHealth Group Incorporated

and UnitedHealthcare, Inc.

Counsel for Petitioners

WILSON-EPES PRINTING CO., INC. — (202) 789-0096 -— WASHINGTON, D.C. 20001

‘a

QUESTION PRESENTED

Whether a district court must compel arbitration of a

plaintiff's RICO claims under a valid arbitration agreement

when that agreement contains limitations on statutorily

available remedies.

PARTIES TO PROCEEDINGS BELOW AND

CORPORATE DISCLOSURE STATEMENT

The parties to the proceedings in the United States Court of

Appeals for the Eleventh Circuit were (a) plaintiffs-appellees

Jeffrey Book, D.O., Dennis Breen, M.D., Michael Burgess,

M.D., Edward L. Davis, D.O., Glenn L. Kelly, M.D., Manual

Porth, M.D., and Charles B. Shane, M.D., and (b) defendants-

appellants Foundation Health Systems, Inc., n/k/a Health Net,

Inc., PacifiCare Health Systems, Inc., n/k/a PacifiCare Health

Plan Administrators, Inc., The Prudential Insurance Company

of America, UnitedHealth Group Incorporated, f/k/a United

HealthCare Corporation, UnitedHealthcare, Inc., and Well-

Point Health Networks Inc. This brief on the merits is being

filed on behalf of petitioners UnitedHealth Group Incor-

porated, UnitedHealthcare, Inc., PacifiCare Health Systems,

Inc., and PacifiCare Operations, Inc. The corporate disclosure

statement for these entities is contained in the petition for

writ of certiorari and is incorporated by reference. No

amendments to that statement are needed to make the

statement current.

TABLE OF CONTENTS

Page

QUESTION PRESENTED w.0.0....ccccccccccccccccecececeeceseeneees i

PARTIES TO PROCEEDINGS BELOW AND

CORPORATE DISCLOSURE STATEMENT ......... i

TABLE OF AUTHORITIES ..00.0......ccccccccccccceceeeeeeeees bone Vv

OPINIONS BELOW 0.00.00.ooooccccccccccccceccscsececseeseseseeereesees I

OT cncencsnsncemneensantcanarnceeamemninsenatnanenmamaameas I

FEDERAL STATUTES INVOLVED 1.00.00. cccccccccceees 2

ee 2

SUMMARY OF ARGUMENT 000...0.o.ccccccccccccccscesceeevees 5

ee 7

I. ARBITRATORS, NOT COURTS, SHOULD

ADDRESS THE VALIDITY OF ARBITRAL

LIMITATIONS ON REMEDIES IN THE

Pe Mee enannensininsiinsnnmsunitinicnancsiantatenes 7

A. Congress Enacted a Limited Role for

Courts in Enforcing Arbitration Agree-

1. The FAA Inquiry: Did the Parties

Agree To Arbitrate the Dispute at Issue

and Is the Arbitration Agreement

aE esiseeeaisiiatniiinsesinsncniiiiasianaiiailiiante 11

2. The Final Inquiry: Did Congress Intend

To Preclude Arbitration of the Statu-

OOTY CORRES G8 BURR .nnoccccccccccccccesccceccseess 12

(iti)

TABLE OF CONTENTS—Continued

B. Congress Intended Arbitrators To Address

Questions Regarding the Availability of

Remedies in the First Instance ....................

THE DAMAGE LIMITATION PROVI-

SIONS COULD NOT JUSTIFY EXCUSING

RESPLNDENTS FROM ARBITRATING

THEIR RICO CLAIMS ............-ccceeeeeeeeennenennnnes

A. A Limitation on Punitive Damages Does

Not Prevent an Award of RICO Treble

B. The Limitation on “Extracontractual Dam-

ages” in Dr. Porth’s Arbitration Agreement

Does Not Impermissibly Limit RICO

C. The Damage Limitation Provisions Are an

Enforceable Part of the Parties’ Con-

D. Even if the Damage Limitation Provisions

Are Unenforceable, Respondents’ RICO

Claims Were Still Arbitrable ......................

CONCLUSION ........:..cccccscscssssssssssssessenssensesesssossonsoeseess

STATUTORY APPENDIRX ...............:cccccceeeeeerenenenennnnenes

TABLE OF AUTHORITIES

FEDERAL CASES

AT&T Techns., Inc. v. Communications Workers

of Am., 475 U.S. 643 (1986) .........ccccccccsseceeeeeeees

Aetna Cas. Sur. Co. v. P&B Autobody, 43 F.3d

PED Cah acinseniicttiniieniiesiianiaiibeitieidimsines

Arkcom Digital Corp. v. Xerox Corp., 289 F.3d

a ccertisinticstninninnseaniirianisasindiamanianiensis

Baravati v. Josephthal, Lyon & Ross, Inc., 28

Barnes v. Gorman, \122 S.Ct. 2097 (2002)............

Barrentine v. Arkansas-Best Freight Sys., Inc.,

Ss Se ereneesnnsnennnennmmnensninenn

Bonny v. Soc’y of Lloyd's, 3 F.3d 156 (CA7

Suna ncmescnsesmmencicimmeememmeneeumntnneaminmmenens

a tenssarnnmincnnenensniiinmmmnmansneeniamntieunatemenuniees

Bowen v. Amoco Pipeline Co., 254 F.3d 925

SS aE cerennentucisncentepuncnagentinninensnentediensnans

Boykin v. Alabama, 395 U.S. 238 (1969) ..............

Carter v. Berger, 777 F.2d 1173 (CA7 1985)........

Central Bank of Denver v. First Interstate Bank

of Denver, 511 U.S. 164 (1994) 000... cccccceeeeeees

Coddington Enters., Inc. v. Werries, 54

F.Supp.2d 938 (N.D. Mo. 1999) 0000... ccccceeees

DBM Tech., Inc. v. Local 227, United Food &

Commercial Workers Int'l Union, 257 F.3d

ee vee

D.H. Overmeyer Co. v. Frick Co., 405 U.S. 174

Davis v. Prudential Sec., Inc., 59 F.3d 1186

iia nena ilar

EEOC v. Waffle House, Inc., 534 U.S. 279

Page

Fe cerenenpmutcaneenienestnmniscmmanmessnemmcennants 11, 12, 39

TABLE OF AUTHORITIES—Continued

Page

Eastern Associated Coal Corp. v. United Mine

Workers of Am., 531 U.S. 57 (2000)...........00000+ 17

Evans v. Jeff D., 475 U.S. 717 (1986) 0.00 36, 37

First Options of Chicago, Inc. v. Kaplan, 514

UB. FEB (1DDS) ncccecceccccccsscrescessssssscsssssscese 11, 17, 22, 26

Friedman's Inc. v. West Virginia ex rel. Dunlap,

No. 02-315, 71 U.S.L.W. 3163 (filed Aug. 27,

ye 34

Gannon v. Circuit City Stores, Inc., 262 F.3d 677

Ol) | . 41,42

Gilmer v. Interstate/Johnson Lane Corp., 500

UB. 2D (1 DPA ) .ncccccccccescccsecccscscsccccsesccosssnssssssosees passim

Graham Oil Co. v. ARCO Prods. Co., 43 F.3d

13046 CCAD 19D5S) .cccccccccrecccsesreccsercssccsescsessscssesees 26

Great W. Mortgage Corp. v. Peacock, 110 F.3d

222 (CA3 1997) .22.00cccrecceecsccsecesesseccecsecssecssesossoes 26

Green Tree Fin. Corp.—Ala. v. Randolph, 531

Ub], 13, 14, 18, 24

Greenberg v. Bear, Stearns & Co., 220 F.3d 22

ON > 24

Halligan v. Piper Jaffray, Inc., 148 F.3d 197

(CA2 1996) ..ncccceccscceccserscessrecvseccecsecssnsscsscsscsensees 24

Herrington v. Union Planters Bank, N.A., 113

F.Supp.2d 1026 (S.D. Miss. 2000)............-00+++ 42

Howsam v. Dean Witter Reynolds, Inc., No. 01-

800 (argued Oct. 9, 2002) ..........c.ceceeeeeeneeeenensnens 12

In re Humana Managed Care Litig., 285 F.3d

971 (CAI 1 2002) ...00.ccecccsecscocecccccscccecsecssecseseees 5, 26, 28

In re Managed Care Litig., 132 F.Supp.2d 989

(S.D. Fle. 2000)......00..cccccccccssccsecssecsessesesesesossevers passim

In re Managed Care Litig., 143 F.Supp.2d 1371

(S.D. Fla. 2001 )............c-ccssccercecseccsesessesseees 5, 11, 12, 28

Inv. Partners, LLP v. Glamour Shots Lic., Inc.,

298 F.3d 314 (CAS 2002) ..........cccceceeeneee 26, 30, 31, 34

Vil

TABLE OF AUTHORITIES—Continued

Page

Johnson v. Zerbst, 304 U.S. 458 (1938) ....cccccccceee. 35

John Wiley & Sons, Inc. v. Livingston, 376 U.S.

ey pe i rvnctencrscinsiiiasisintipastneatantegastaisateiaitaes 17, 22, 27

Jones v. Fujitsu Network Communications, Inc.,

81 F.Supp.2d 688 (N.D. Tex. 1999) 000. 42

LaPrade v. Kidder, Peabody & Co., Inc., 246

J 7 SE ee 24

Larry's United Super, Inc. v. Werries, 253 F.3d

TE aTITTTEccsiensieichiciieniiiinianiasiensessiianbeteininitaeme 26

Lipcon v. Underwriters at Lloyd's, London, 148

ee ee ED MINIT cniesiccistinneiieniiaiesitbiiniietinees 38

Liquid Air Corp. v. Rogers, 834 F.2d 1297 (CA7

Si cnemrenenniysitapnentniatipnmaiaies Senenesteununtescmesss 30

Long v. Silver, 248 F.3d 309 (CA4 2001) ............. 34

MCI Telecommunications Corp. v. Matrix Com-

munications Corp., 135 F.3d 27 (CAI 1998).... 26, 34

Major League Baseball Players Ass'n v. Garvey,

Se 17

Mastrobuono v. Shearson Lehman Hutton, Inc.,

Tee 23, 34

Metro E. Ctr. for Conditioning & Health v.

Qwest Communications Int'l, Inc., 294 F.3d

0 ee 26

Mitsubishi Motors Corp. v. Soler Chrysler-

Plymouth, Inc., 473 U.S. 614 (1985) ......ccccc000. passim

Molzof v. United States, 502 U.S. 301 (1992)....... 30

Montes v. Shearson Lehman Bros., Inc., 128 F.3d

eT HEU ccenniticnntineninitpancertinneiinemonnsnssen 24, 25

Moses H. Cone Mem'l Hosp. v. Mercury Constr.

ee passim

NLRB v. Allis-Chalmers Mfg. Co., 388 U.S. 175

Gee errssinnradescorsecsrensnannnunennmeanmmmnentecenenmenses 35

Vill

TABLE OF AUTHORITIES—Continued

Page

Nat'l Equip. Rental, Ltd. v. Szukhent, 375 U.S.

eee 35

Nat'l Post Office Mailhandlers, Watchmen,

Messengers and Group Leaders Div.,

Laborers Int'l Union of N. Am., AFL-CIO v.

United States Postal Serv., 75\ F.2d 834 (CA6

DBD ecccceccsssnsnsnsstscssensanssensteesessnsnnessnnsssnsessnenneses 25

New York v. Hill, 528 U.S. 110 (2000)............00000 35, 40

Oubre v. Entergy Operations, Inc., 522 U.S. 422

(DBE) nccacccccccncssescsesccssessncccsssssnnssssenssnessssosssssnssoss 37

Paladino v. Avnet Computer Techs., Inc., 134

F.3d 1054 (CAL 1 1998) .....ccccccecsceeseeeeeeeesenees 26, 33, 39

Prima Paint Corp. v. Flood & Conklin Mfg. Co.,

388 U.S. 395 (1967)........ccccccccscseceeresseresereseennes 9, 18, 26

Quiller v. Barclays American/Credit, Inc., 764

F.2d 1400 (CALL 1985) .......ccccccccceereeeeeeeeeeeneees 41

Raytheon Co. v. Automated Bus. Svs., Inc., 882

F.2d 6 (CAI 1989)..........cccccesccecssessessereseeresennsens 34

Richards v. Lloyd's of London, 135 F.3d 1289

ACAD 1DDB) ncccccccccocceccseccssessoccssccssessccssscssssescosnees 38

Roby v. Corp. of Lloyd’s,.996 F.2d 1353 (CA2

IDBS) ..cccccecsccccstecsssssssevsessssososssssssssssssonsssossossooesess 38

Rodriguez de Quijas vy. Shearson/American

Express, Inc., 490 U.S. 477 (1989) ......ccccceereeees 13

Scherk v. Alberto-Culver Co., 417 U.S. 506

(ID PG) .ccccccccssccssccscsssssccssscsssenssssssnsssnssensssncssenossnss 8

Schneckloth v. Bustamonte, 412 U.S. 218

(1973) ...cccceeveees samemesumessnapennamasseesneenesenqncenganmsaneete 35

Scott v. Prudential Sec., Inc., 141 F.3d 1007

ACAI 19DG) nccccccceccccccccccccscsssscsescsssssssssssssososoees 24

Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479

(BDBS) .ncccccscccsccsscsscccscssssessescsssseseseosssesnssescssesseseee 37, 38

TABLE OF AUTHORITIES—Continued

Page

Shearson/American Express, Inc. v. McMahon,

nn a iaitineiiiecainantaiititcaseainieadiiliceaieen passim

Sheldon vy. Vermonty, 269 F.3d 1202 (CAI0

SET ciapsinscccasiidanadesetiitatiipieidinniditestiinbetitmadiasesies 24

Shutte v. Thompson, 82 U.S. 151 (1872) ....ccccccc000 35

Southland Corp. v. Keating, 465 US. |

Ene ec 9, 10, 17, 39

Surman v. Merrill, Lynch, Pierce, Fenner &

Smith, 733 F.2d 59 (CAB 1984) .....cccccccccccecceeees 34

The Bremen v. Zapata Off-Shore Co., 407 U.S. |

[Eire aanestierrensnnsenpatnnetensenesnndiansitinsionunesinedetitecgsinaes 14, 15

Thompson v. Irwin Home Equity Corp., 300 F.3d

eee 26

United States v. Khattak, 273 F.3d 557 (CA3

IIa cnccaneasnciieenentcaensnecsmensdiiisitnitesatatenimasiaaatamaes 35

United States v. Mezzanatto, 513 U.S. 196

ee ee 35, 36

United Steelworkers of Am. v. Enter. Wheel &

Car Corp., 363 U.S. 593 (1960) .......cccccccceeesseees 17, 20

United Steelworkers of Am. v. Warrior & Gulf

Nav. Co., 363 U.S. 574 (1960)........ccccccccceeseeeees 11, 32

Vermont Agency of Natural Res. v. United States

ex rel. Stevens, 529 U.S. 765 (2000).........c0000000 31

Vimar Seguros y Reaseguros, S.A. v. M/V Sky

Reefer, 515 U.S. 528 (1995) .......cccccccceeeseeeees 15, 19, 22

Vineberg v. Brunswick Corp., 391 F.2d 184

| ee 4

Volt Info. Sciences, Inc. v. Bd. of Trustees, 489

Be SE srsccnneciensiatnccnidenenccnssnninans 10, 29, 36, 39

W.R. Grace & Co. v. Rubber Workers, 461 U.S.

Hao MT in ctatibeneedteenenenennnensnnseinmeenenpentainimennnsies 20, 25

Williams v. Cigna Fin. Advisors Inc., 197 F.3d

See ann TEN itiincttenicinaiiinititininasiatpentindiiiitianes 24

TABLE OF AUTHORITIES—Continued

Page

Wonderland Greyhound Park, Inc. vy. Autotote

Sys., Inc., 274 F.3d 34 (CAL 2002)........ccccecceeeee 24

Zechman v. Merrill Lynch, Pierce, Fenner &

Smith, Inc., 742 F.Supp. 1359 (N.D. Ill.

Di cecececsutinnssnindesscactinsenmentininieninccaimsetimantionas 42

FEDERAL STATUTES

Pi BF ccsesesnsscnsstsenierensnitintensacstsmmemmeniantnionn 2,7

|! ot een passim

DI, Bi esccenscccsssctnnscrvesconnsscsnenncensssenessonenncenanes passim

2) i Rendsvonnaniinvns passim

DUEL. BBB cccncccccsevcesccsesscccssscssseocsvessenvenssevsacssnencie passim

SS lt 40

RE dl | Eee 2, 30, 31, 37, 39

FB EIB. SERGE GD ceccerecccsccveesscssccsssrcssscsssemansseesees l

LEGISLATIVE HISTORY

Arbitration of Interstate Commercial Disputes,

Joint Hearings Before the Subcomms. of the

Comms. on the Judiciary, Congress of the

United States, on S. 1005 and H.R. 646, 68th

Cong., Ist Sess. (1924) ..........0ccccrcscsererersseresssees 8

Organized Crime Control Act: Hearings on S. 30

Before Subcomm. No. 5 of the House Comm. on

the Judiciary, 91st Cong., 2nd Sess. (1970) ....... 38

116 Cong. Rec. 972 (1970).......cccccsceeseeeeeeereeeeneens 37

116 Cong. Rec. 35,346 (1970).......ccccceeeeeeeeereeeees 31

116 Cong. Rec. 35,363 (1970).......ccccceceecereeeeeenees 38

116 Cong. Rec. 36,296 (1970).......cccecceereeereeeeeenees 38

H.R. Rep. No. 68-96 (1924)......ccccccseesseereeneeneeenees 9,39

S. Rep. No. 91-617 (1969).......ccccecseceeeereeneeneeneees 31

S. Rep. No. 94-1011 (1976), reprinted in 1976

EF at ot SG. Sees 37

TABLE OF AUTHORITIES—Continued

S. 2048, 90th Cong., Ist Sess. (1967)

S. 2049, 90th Cong., Ist Sess. (1967)

S. 1623, 91st Cong., Ist Sess. (1969)

MISCELLANEOUS

BLACK’S LAw DICTIONARY (7th ed. 1999)

of Foreign Arbitral Awards, art. V.(2)(b), 21

U.S.T. 2517

1993)

Judith A. Morse, Note, Treble Damages Under

RICO: Characterization and Computation, 6|

NOTRE DAME L. REV. 526 (1986) ..........:ccccccc0ee.

| RESTATEMENT (THIRD) OF FOREIGN.RELATIONS

LAW OF THE UNITED STATES §482(2)(d)

CCRC ee eee eee

SRT eee

Convention on the Recognition and Enforcement

leh LE

IN THE

Supreme Court of the Anited States

No. 02-215

PACIFICARE HEALTH SYSTEMS, INC., ef al.,

Petitioners,

JEFFREY Book, D.O., et al., .

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Eleventh Circuit

PETITIONERS’ BRIEF

Petitioners respectfully request the Court to reverse the

judgment of the United States Court of Appeals for the

Eleventh Circuit.

OPINIONS BELOW

The decision of the court of appeals (Pet. App. Al-A10) is

reported at 285 F.3d 971. The relevant decisions of the

district court (Pet. App. Al1-A46, A47-A54) are reported at

143 F.Supp.2d 1371 and 132 F.Supp.2d 989.

JURISDICTION

The Court has jurisdiction under 28 U.S.C. §1254(1). The

court of appeals issued its judgment on March 14, 2002, and

denied a petition for rehearing or rehearing en banc on June

21, 2002. Pet. App. AS5-A56. Petitioners timely filed their

petition for writ of certiorari on August 6, 2002.

FEDERAL STATUTES INVOLVED

This case involves §§2, 4, 10, and 11 of the Federal

Arbitration Act (FAA), 9 U.S.C. §1 et seq., and §1964 of the

Racketeer Influenced and Corrupt Organizations Act (RICO),

18 U.S.C. §1961 et seg. The text of these provisions is set

out in the appendix to this brief.

STATEMENT

This case is a consolidated multi-district litigation that was

initially filed by a group of physicians accusing managed

health care organizations, with whom they had contracted, of

not properly paying claims they had submitted. This lawsuit

was brought in violation of the physicians’ arbitration

agreements, and they have concomitantly sought to expand

the litigation by effectively nullifying the application of

thousands of arbitration agreements by which physicians have

contractually bound themselves to resolve their disputes

through arbitral proceedings.’

United and PacifiCare process hundreds of millions of

claims each year, and it is inevitable that disputes

occasionally will arise with physicians regarding the

disposition of some of those claims. Given the sheer volume _

of claims, it is essential for petitioners to have an effective

dispute resolution mechanism that appropriately balances the

parties’ interests in fairness and efficiency. To that end,

petitioners have internal grievance processes that address

physician complaints about the treatment of claims. Issues

that are not resolved at that level may be submitted to internal

appeals processes. A physician may initiate an arbitration

proceeding to resolve any remaining issues only when neither

' Subsequent to the orders that are the subject of this proceeding, the

district court certified a nationwide plaintiff class of approximately

600,000 physicians. The court of appeals has granted a Rule 23(f)

petition to review that decision, and issues relating to class treatment of

arbitrable claims are not currently before the Court.

the grievance process nor the appeals process is successful.

Typically, physicians who contract with United and

PacifiCare execute an agreement to handle their disputes

through this nonlitigation mechanism.

In addition to their vast superiority in efficiency, peti-

tioners’ grievance-appeal-arbitration processes also control

litigation costs, ensuring a cost-effective means of resolving

disputes without many of the costs and risks associated with

prolonged litigation. The cost of litigating with a physician

over even a single claim can be onerous, and the risk of jury

verdicts far out of proportion to the amount of the claim is

substantial. As the Court has cogently observed, “The rea-

sons for favoring arbitration are as wise as they are obvious:

litigation is costly and time consuming . . . .””

Respondents Glenn Kelly, M.D., and Manual Porth, M.D.,

individually or as members of larger physician groups,

entered into physician agreements with United. Those

agreements contained arbitration provisions under which Drs.

Kelly and Porth agreed to submit “any disputes about their

business relationship” with United “to binding arbitration.”

J.A.168, 212. Each agreement also sought to limit any arbi-

tration award of punitive or exemplary damages. J.A.168,

212 (Dr. Kelly’s arbitration agreement with United limited

the arbitrator’s ability to award “punitive or exemplary dam-

ages”); J.A.212 (Dr. Porth’s arbitration agreement with

United limited the arbitrator’s ability to award “extracon-

tractual damages of any kind, including punitive or exem-

plary damages”); J.A.168.

Respondents Jeffrey Book, D.O., and Dennis Breen, M.D.,

individually or as members of larger physician groups, were

similarly bound by their physician contracts to arbitrate

? Barrentine v. Arkansas-Best Freight Sys., Inc., 450 U.S. 728, 747

(1981) (Burger, C. J., dissenting).

disputes with PacifiCare.’ The PacifiCare agreements

required Drs. Book and Breen to arbitrate “any controversy”

“arising out of” their respective agreements, and further

stated that the “arbitrator shall have the power to grant all

legal and equitable remedies and award compensatory

damages provided by [State] law, except that punitive

damages shall not be awarded.” J.A.84, 106-07, 146-47.

Respondents disregarded their contractual commitments to

arbitrate when they sued petitioners and others on August 14,

2000. R.167.1.4 Respondents claimed to be “victims of a

scheme implemented by Defendants in violation of the

Racketeer Influenced and Corrupt Organization Act (RICO),”

id., at 2, and they also alleged various other federal and state-

law causes of action, including claims for breach of contract

and quantum meruit: The defendants, including petitioners,

timely moved the district court to compel respondents to

arbitrate all of their claims. See R.320.6-7; R.421.6-7;

R.583.11-16, 18.

The district court granted in part and denied in part the

various defendants’ motions to compel arbitration. See /n re

Managed Care Litig., 132 F.Supp.2d 989, 992 (S.D. Fla.

2000). The district court held that petitioners’ arbitration

agreements were generally enforceable and sufficiently broad

to encompass respondents’ claims against petitioners.” But,

> Breen is not a named plaintiff in the most recent amended complaint,

but he is a member of the certified class and is still the subject of an order

granting and denying arbitration, on which the Court granted a writ of

certiorari. Moreover, respondents are seeking leave to file another

amended complaint that does list Breen as a named plaintiff.

* Citations to the underlying record will reference the docket number

and relevahit page numbers.

‘> The district court correctly held that so long as respondents’

“allegations ‘touch matters’ covered by the arbitration agreement, then

those claims must be arbitrated, irrespective of how the allegations are

labeled.” Jn re Managed Care Litig., 132 F.Supp.2d, at 993. The district

court held that respondents’ allegations (including their RICO allegations)

while recognizing that RICO claims are subject to arbitration,

the district court declined to compel respondents to arbitrate

their RICO claims because it held that they could not obtain

“meaningful relief” in arbitration on those claims as a result

of the damage limitation provisions. /d., at 1000-01, 1005.

Rather than limiting its review to questions of arbitrability,

the district court chose to examine the arbitration agreements’

damage limitation provisions; interpreted those provisions to

preclude an award of RICO treble damages (even though no

provision expressly says that); and held that, because the

damage limitation provisions did not permit “meaningful re-

lief” in arbitration, respondents would be completely relieved

of their obligation to arbitrate their RICO claims. /d.; see

also In re Managed Care Litig., 143 F.Supp.2d 1311, 1375

(S.D. Fla. 2001).

The court of appeals affirmed the district court’s holding

that respondents were not required to arbitrate their RICO

claims because they could not obtain RICO treble damages in

arbitration. See Jn re Humana Managed Care Litig., 285 F.3d

971, 973-74 (CAI1 2002) (“We affirm in its entirety the

district court’s order for the reasons set forth in its compre-

hensive opinion found at 132 F.Supp.2d 989 (S.D. Fla.

2000).”).

SUMMARY OF ARGUMENT

The Court should reject the lower courts’ attempt in this

case to significantly enlarge the gatekeeping function that the

courts necessarily perform when asked to compel arbitration.

The Court has properly limited the courts’ function in

determining a motion to compel arbitration to determining:

(1) whether the parties are bound by an arbitration agreement ;

whose scope covers the parties’ dispute, (2) whether under §2

“touch[ed] matters” relating to their arbitration agreements. /d, at 1000

n.3, 1001 n.4, 1005 n.9. Respondents did not dispute those conclusions

on appeal.

of the FAA there are grounds at law or equity justifying the

revocation of the arbitration agreement, and (3) when a

federal statutory claim is asserted, whether Congress has

expressed a clear intent that such a claim not be arbitrated

at all.

In this case, none of those factors would prevent

arbitration, and the Court should not weaken the protections

of the FAA by empowering judges to abrogate private

arbitration agreements simply by finding fault with previ-

ously agreed-upon provisions in those agreements limiting

arbitral procedures or remedies. The interpretation and

enforcement of those provisions is well within the scope of

the arbitrator’s contractually assigned role, and those deci-

sions are best made in the first instance by the arbitrator as

part of the overall arbitral process. An expansion of the

courts’ role at the motion-to-compel stage to evaluate the

terms under which the parties agreed to arbitrate would upset

the contractual expectations of the party seeking arbitration—

by shifting to the court determinations intended for the

arbitrator—and would severely frustrate the FAA’s support

for arbitration by significantly delaying the mechanism

through which the FAA enforces arbitration. That kind of

prearbitration scrutiny also would dramatically expand the

limited prearbitration review authorized by §§2 and 4 of the

FAA and impinge upon the broader postarbitration review

envisioned under §§10 and 11 of the Act. The Court has

repeatedly noted that postarbitration review is ‘sufficient to

ensure that an arbitrator has complied with the controll-

ing law. "

A who believes that a remedial limitation is not vali

may a that contention before the arbitrator, who is bound

to apply controlling law. Allowing district courts to evaluate

such provisions in the first instance not only usurps the role

of the arbitrator, but also exhibits a strong distrust of the

arbitral process because it improperly presupposes that

arbitrators will not, or cannot, correctly apply the law in

assessing challenges to remedial limitations in arbitration

agreements.

But even assuming that the lower courts could properly

undertake to evaluate the damage limitation provisions in

petitioners’ arbitration agreements at the motion-to-compel

Stage, those provisions did not impermissibly restrict

respondents’ RICO remedies in arbitration so as to excuse

respondents from arbitrating their RICO claims altogether.

RICO treble damages were not intended to be primarily

punitive, and even if there were some uncertainty on that

account, the strong presumption favoring arbitration should

have required the district court to adopt an interpretation of

the damage limitation provisions that would permit

arbitration. Most importantly, commercial parties may freely

contract to restrict available remedies, including extracon-

tractual and punitive damages, whether in an arbitration

clause or elsewhere in a contract. And, finally, even if the

damage limitation provisions were not themselves enforce-

able against RICO claims, the proper remedy would have

been to restrict the applicability of the damage limitation

provisions, not to strike the parties’ agreement to arbitrate the

RICO claims altogether.

ARGUMENT

I. ARBITRATORS, NOT COURTS, SHOULD

ADDRESS THE VALIDITY OF ARBITRAL

LIMITATIONS ON REMEDIES IN THE FIRST

INSTANCE.

In 1925, Congress enacted what is now known as the

Federal Arbitration Act, 9 U.S.C. §1, et seg. (FAA). The text,

legislative history, and consistent judicial interpretation of the

FAA illustrate that Congress intended the Act to provide a

legal basis for the enforcement of arbitration agreements that

would limit the courts’ involvement in the arbitration process.

A. Congress Enacted a Limited Role for Courts in

Enforcing Arbitration Agreements.

The FAA was intended to end judicial hostility toward

arbitration agreements and to strengthen enforcement of

contractual agreements to arbitrate. Gilmer v. Interstate/

Johnson Lane Corp., 500 U.S. 20, 24 (1991); Scherk v.

Alberto-Culver Co., 417 U.S. 506, 510-11 (1974). At the

core of the Act is Congress’s belief that agreements to

arbitrate are, in and of themselves, “business contracts” that

should be enforced by the courts in the same manner as any

other business contract would be enforced. “An agreement

for arbitration is in its essence a business contract. It differs

in no essential [respect] from other commercial agreements.

It should stand upon the same plane and be regarded by the

law in the same light . . . .” Arbitration of Interstate

Commercial Disputes, Joint Hearings Before the Subcomms.

of the Comms. on the Judiciary, Congress of the United

States, on S. 1005 and H.R. 646, 68th Cong. 38 (1924).

Congress’s mandate that courts end their historical hostility

toward arbitration and treat arbitration agreements like other

commercial or business contracts is clear from the language

of the FAA, and in particular §2, the “primary substantive

provision” of the FAA. See Moses H. Cone Mem'l Hosp. v.

Mercury Constr. Corp., 460 U.S. 1, 24 (1983). Section 2

provides that a written arbitration agreement “shall be valid,

irrevocable, and enforceable, save upon such grounds as exist

at law or in equity for the revocation of any contract.” 9

U.S.C. §2 (emphasis added). That section declares “a liberal

federal policy favoring arbitration agreements.” Moses H.

Cone Mem’! Hosp., 460 U.S., at 24; see Mitsubishi Motors

Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 625

(1985) (“The ‘liberal federal policy favoring arbitration

agreements’ manifested by [§2] and the Act as a whole, is at

bottom a policy guaranteeing the enforcement of private

contractual arrangements . . . .”) (internal citations omitted).

In enacting §2, Congress sought to end the days when a

party could agree to arbitrate a dispute according to specific

terms and then, having the dispute come to fruition, change

its mind and simply walk away from the agreement without

repercussion. See H.R. REP. No. 68-96, at 2 (1924). Absent a

valid defense to the core agreement to arbitrate, like fraud,

duress, mistake, or other common-law contract defenses,

Congress intended arbitration agreements to be enforced like

other contracts. See Prima Paint Corp. v. Flood & Conklin

Mfg. Co., 388 U.S. 395, 404 n.12 (1967).

Congress did not want parties objecting to arbitration to be

able to force lengthy court proceedings, at great expense, over

whether they have to arbitrate. On the contrary, the FAA was

designed to reflect a “statutory policy of rapid and

unobstructed enforcement of arbitration agreements.” Moses

H. Cone Mem 'l Hosp., 460 U.S., at 23. A party should not be

permitted “to ignore the [arbitration] contract and resort to the

courts” precisely because “[s]uch a course could lead to

prolonged litigation, one of the very risks the parties, by

contracting for arbitration, sought to eliminate.” Southland

Corp. v. Keating, 465 U.S. 1, 7 (1984); see also Moses H.

Cone Mem'l Hosp., 460 U.S., at 22 (“Congress’ clear intent”

in the FAA was “to move the parties to an arbitrable dispute

out of court and into arbitration as quickly and easily as

possible”); Prima Paint, 388 U.S., at 404 (discussing the

“unmistakably clear congressional purpose that the arbitration

procedure, when selected by the parties to a contract,

be speedy and not subject to delay and obstruction in

the courts”).

To achieve swift resolution of controversies regarding the

enforcement of an arbitration agreement, Congress indicated

that a court’s role in reviewing an arbitration agreement

should be limited to examining (1) whether the dispute is

within the scope of the parties’ arbitration agreement;

(2) whether the agreement to arbitrate is revocable on

grounds at law or in equity; and (3) when one of the parties

asserts a federal statutory claim, whether Congress has clearly

expressed an intent that the statutory claim not be arbitrated.

See Mitsubishi, 473 U.S., at 628; Southland Corp., 465 U.S.,

at 10-11. :

“The court shall hear the parties, and upon being

satisfied that the making of the agreement for arbitration

or the failure to comply therewith is not in issue, the

court shall make an order directing the parties to proceed

in arbitration in accordance with the terms of the

agreement.” 9 U.S.C. §4.

Congress wanted arbitrators, not courts, to hear and

determine any issues beyond challenges to the making or

scope of arbitration agreements. Because “arbitration is

strictly a matter of contract, the parties to an arbitration

agreement [are] ‘at liberty to choose the terms under which

they will arbitrate.” Volt Info. Sciences, Inc. v. Bd. of

Trustees, 489 U.S. 468, 472 (1989) (citations omitted).

Courts can give effect to this important federal policy

favoring arbitration only by refraining—at the motion-to-

compel stage—from additional inquiries into the meaning and

significance of procedural or remedial limitations in an

otherwise enforceable arbitration agreement and leaving those

determinations to the arbitrator in the first instance. Unless

the party objecting to arbitration can establish that the

arbitration agreement may be revoked under §2 or that

Congress has categorically expressed its intent that certain

federal statutory claims not be arbitrable, the court should

enforce the agreement according to its terms.

—

-l. The FAA Inquiry: Did the Parties Agree To

Arbitrate the Dispute at Issue and Is the

Arbitration Agreement Revocable?

“[T]he question of arbitrability—whether the [arbitration

agreement] creates a duty for the parties to arbitrate the

particular grievance—is undeniably an issue for judicial

determination.” AT&T Techns., Inc. v. Communications

Workers of Am., 475 U.S. 643, 649 (1986). Because arbi-

tration is “a matter of contract between the parties,” First

Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943

(1995), a court asked to compel arbitration of a dispute must

first “determine whether the parties agreed to arbitrate that

dispute.” Mitsubishi, 473 U.S., at 626; see EEOC v. Waffle

House, Inc., 534 U.S. 279, 294 (2002) (“Because the FAA is

‘at bottom a policy guaranteeing the enforcement of private

contractual arrangements,’ we look first to whether the parties

agreed to arbitrate a dispute, not to general policy goals, to

determine the scope of the agreement.”) (internal citation

omitted). The parties’ intentions control that determination,

“but those intentions are generously construed as to issues of

arbitrability.” Mitsubishi, 473 U.S., at 626. “An order to

arbitrate the particular [dispute] should not be denied unless it

may be said with positive assurance that the arbitration clause

is not susceptible of an interpretation that covers the asserted

dispute. Doubts should be resolved in favor of coverage.”

United Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363

U.S. 574, 582-83 (1960).

There is no question that respondents’ RICO claims are

within the scope of their arbitration agreements. The

agreements plainly state that they will arbitrate “any disputes

about their business relationship” with United and “[a]ny

controversy” or “claim arising out of” their agreements

with PacifiCare. J.A.84, 106, 146, 168, 212. The district

court specifically held—-and respondents have not disputed in

this Court—that the parties’ arbitration agreements reached

the RICO claims. See In re Managed Care Litig., 143

F.Supp.2d, at 1375; In re Managed Care Litig., 132

F.Supp.2d., at 994, 1000 n.3, 1001 n.4.°

Nor is there any dispute in this case about §2 revocation

issues. Neither of the lower courts found that the arbitration

agreements could be revoked on §2 grounds. To the contrary,

the lower courts both upheld the arbitration agreements

themselves, and the district court ordered respondents to

arbitrate various claims under their respective arbitration

agreements. Thus, the issue in this particular case is not

whether the arbitration agreements could be revoked under

§2. Instead, the issue is solely whether the district court

could refuse to order arbitration of respondents’ RICO claims

based on perceived inadequacies in the damage limitation

provisions.

2. The Final Inquiry: Did Congress Intend To

Preclude Arbitration of the Statutory Claims

at Issue?

Ordinarily the inquiry would conclude with the recognition

that the parties irrevocably agreed to arbitrate a dispute within

the scope of a valid agreement. See Waffle House, 534 U.S.,

at 294 & n.9. The Court has acknowledged, however, that

Congress can, if it desires, preclude the arbitration of certain

statutory claims. Mitsubishi formally recognized that

Congress can make claims under a particular statute

nonarbitrable, notwithstanding the FAA. 473 U.S., at 625-28.

The Court emphasized, however, that it will not lightly

conclude that Congress intended to preclude arbitration, but

instead will assume that Congress intends statutory claims to

® Another arbitration case currently pending before the Court, Howsam

v. Dean Witter Reynolds, Inc., No. 01-800 (argued Oct. 9, 2002), also

involves a “who decides” issue. But Howsam raises serious questions

about the scope of the parties’ agreement to arbitrate that do not exist in

this case. The lower courts in this case determined that respondents

clearly agreed to arbitrate their disputes with United and PacifiCare.

be arbitrable unless Congress itself has evinced in the

Statute’s text or legislative history an intention to preclude

arbitration, id., at 628, or there is an inherent conflict that puts

arbitration at odds with the statute’s underlying purposes. See

Shearson/American Express, Inc. v. McMahon, 482 U.S. 220,

227 (1987). When statutory claims are at issue, the final part

of the court’s motion-to-compel inquiry is whether Congress

has expressly precluded arbitration of the statutory cause of

action at issue. Mitsubishi, 473 U.S., at 628; see Green Tree

Fin. Corp.—Ala. v. Randolph, 531 U.S. 79, 90 (2000).

The Court’s prior decisions in this area have repeatedly

focused on whether Congress categorically intended to

exempt certain statutory claims from arbitration. See

Mitsubishi, 473 U.S., at 627 (“[I]t is the congressional

intention expressed in some other statute on which the courts

must rely to identify any category of claims as to which

agreements to arbitrate will be held unenforceable.”)

(emphasis added); id., at 628 (“if Congress intended the

substantive protection afforded by a given statute to include

protection against waiver of the right to a judicial forum, that

intention will be deducible from text or legislative history”).

Consistent with that view, the Court has determined that

parties may effectively vindicate in arbitration causes of

action created by the Securities Act, the Securities Exchange

Act, RICO,’ the Sherman Act, and the Age Discrimination in

Employment Act of 1967. See Rodriguez de Quijas v.

Shearson/American Express, Inc., 490 U.S. 477, 483 (1989);

McMahon, 482 U.S., at 242; Mitsubishi, 473 U.S., at 637,

640; Gilmer, 500 U.S., at 25, 28.

” McMahon addressed the arbitrability of RICO claims and held that

they are arbitrable. See 482 U.S., at 238 (“There is nothing in the text of

the RICO statute that even arguably evinces congressional intent to

exclude civil RICO claims from the dictates of the Arbitration Act.”); id.

(“There is no hint in [the] legislative debates that Congress intended for

RICO treble-damages claims to be excluded from the ambit of the

Arbitration Act.”).

Respondents’ “effective vindication” or “meaningful

relief” argument does not relate to the categorical arbitrability

of RICO claims, but instead is an attempt to inappropriately

extend the Court’s categorical, statute-level review to specific

arbitral procedures or remedies agreed to by the parties. In

the face of the FAA’s statutory text and the pe icy concerns

requiring limited review at the motion-to-compel stage,

respondents want the courts to independently review, before

arbitration, the agreed-upon terms of the arbitration

agreement to ensure that the parties have not limited the

respondents’ ability to obtain all statutorily authorized

remedies. None of the Court’s cases, however, permit a court

to consider free-ranging “effective vindication” claims

separate from the categorical review of statutory rights or

traditional §2 revocation analysis.® “At this interlocutory

* In Green Tree, the Court refused to allow a plaintiff to avoid

arbitration of her Truth in Lending Act (TILA) claims even though she

argued that her “arbitration agreement’s silence with respect to costs and

fees creates a ‘risk’ that she will be required to bear prohibitive arbitration

costs if she pursues her [TILA] claims in an arbitral forum.” 531 U.S., at

90. The Court suggested that “[{i]t may well be that the existence of large

arbitration costs could preclude a litigant . . . from effectively vindicating

her federal statutory rights in an arbitral forum,” id., but then held that the

plaintiff had failed to carry her burden of proving “that arbitration would

be prohibitively expensive.” /d., at 92. The cost-of-arbitration issue in

Green Tree had nothing to do with what procedures should be utilized, or

what statutory remedies should be afforded, in arbitration. Rather, the

Court in Green Tree, citing 9 U.S.C. §2, id, at 89, focused on whether a

party can avoid arbitration if she can prove that she will be cut off from

access to any dispute-resolution forum altogether due to the high costs of

arbitration. See id., at 92 (a party has the burden to make a showing of

“prohibitive expense” to avoid arbitration); id., at 93 (Ginsburg, J.,

concurring and dissenting) (the question of “is the arbitral forum adequate

to adjudicate the claims at issue” is distinct from the question of “is that

forum accessible to the party resisting arbitration”) (emphasis in original).

Cf. The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 18 (1972) (stating

that a party can invalidate a choice-of-forum clause if “the contractual

forum will be so gravely difficult and inconvenient that [the party] will for

stage it is not established what law the arbitrators will apply

to [respondents’] claims or that [respondents] will receive

diminished protection as a result.” Vimar Seguros y

Reaseguros, S.A. v. M/V Sky Reefer, 515 U.S. 528, 540

(1995); accord id., at 542 (O’Connor, J., concurring in the

judgment).

Respondents cannot reasonably assert that the terms of

their arbitration agreements completely foreclose their

statutory remedies for the alleged RICO violations. But, in

any event, and for the reasons that follow, permitting

prearbitration court review of consensual partial restrictions

on statutory remedies would dramatically alter the Court’s

established motion-to-compel analysis and seriously weaken

the Court’s long-standing support for arbitration under the

FAA.

B. Congress Intended Arbitrators To Address

Questions Regarding the Availability of

Remedies in the First Instance. :

Once a court has determined that the parties have

contractually agreed to arbitrate the statutory claims and that

Congress has not barred arbitration of those claims, no further

inquiry is required or permitted under §2 or §4 of the FAA,

and the court should compel arbitration. In this case,

respondents do not dispute that their RICO claims are

generally arbitrable; rather they assert only that the damage

limitation provisions to which they agreed are improper.

Those allegedly invalid damage limitation provisions,

respondents argue and the courts below held, render their

agreements to arbitrate unenforceable as to their RICO

claims. To get to that result, respondents had to ask the

all practical purposes be deprived of his day in court”). The Court’s

resolution of the issue was consistent with its traditional §2 revocation

analysis and its categorical review of statutory rights.

district court to: (1) bypass the general arbitrability issue;

(2) interpret the damage limitation provisions and declare

them improper as a matter of law; (3) speculatively conclude

that the arbitrator would not properly apply the law to the

_ provisions (which is inherent in the district court’s declaration

that respondents could not obtain “meaningful relief”);

(4) reject all of petitioners’ defenses of the damage limitation

provisions; and (5) then finally rule that the invalidity of the

damage limitation provisions somehow invalidated the entire

arbitration agreement as to the RICO claims independent of

any known §2 grounds.

In essence, the district court interpreted and made

substantive determinations, not about the scope of what the

parties agreed to arbitrate, but about the merits of the matters

that the parties indisputably agreed to arbitrate. But that kind

of extensive review is precisely what is not supposed to occur

at the motion-to-compel stage, not only because it contradicts

the text and legislative history of §2 and §4 of the FAA, but

also because it ignores the parties’ contractual agreement to

arbitrate the dispute, usurps the role of the arbitrator,

demonstrates a distrust of the arbitral process that the FAA

was intended to dispel, and improperly preempts the court’s

postarbitration review under §10 (grounds for judicial vacatur

of an arbitral award) and §11 (grounds for judicial

modification or correction of the arbitral award) of the FAA.

Parties ordinarily do not catalog specific causes of action

that they want to address through alternative dispute

resolution at the time they execute an arbitration agreement;

they instead broadly agree, for instance, to arbitrate “any

disputes about their business relationship,” J.A.168, 212, and

contractually agree on the general rules of the arbitration and

any remedial limitations that they mutually accept. When

parties agree to remedial limitations in an arbitration

agreement, they have agreed not only to the limitation itself,

but also to have the limitation applied or interpreted by the

arbitrator. See First Options, 514 U.S., at 945. “They have

‘bargained for’ the ‘arbitrator’s construction’ of their

agreement.” Eastern Associated Coal Corp. v. United Mine

Workers of Am., 531 U.S. 57, 62 (2000) (quoting United

Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S.

593, 599 (1960)); see Major League Baseball Players Ass'n

v. Garvey, 532 U.S. 504, 509-10 (2001).

In respondents’ view, however, when an arbitration

agreement limits available remedies, the party asserting a

Statutory cause of action is entitled to litigate, before

arbitration, whether that specific limitation allows

“meaningful relief” in arbitration. And, because a plaintiff

simply may choose to assert a statutory cause of action, a

plaintiff who seeks to avoid arbitration easily may delay or

frustrate the arbitration agreement merely by challenging a

remedial limitation on the ground that it violates the

plaintiff's right to a full statutory remedy. A plaintiff might

challenge any number of remedial agreements between the

parties, including, for example, an arbitration agreement

capping the payment of attorneys’ fees, an agreement for

liquidated damages, or an agreement otherwise limiting

compensatory or punitive damages.

Regardless of the outcome, the mere process of being

forced to litigate the meaning and effect of the remedial

provisions of the arbitration agreement will effectively deny

the nonobjecting party’s contractual right to arbitration. See

Southland Corp., 465 U.S., at 7 (stating that “prolonged

litigation” is “one of the very risks the parties, by contracting

for arbitration, sought to eliminate”); John Wiley & Sons, Inc.

v. Livingston, 376 U.S. 543, 558 (1964) (stating that delay in

ordering arbitration “may entirely eliminate the prospect of a

speedy arbitrated settlement of the dispute, to the

disadvantage of the parties”). That process, if endorsed,

would eviscerate a party’s right to enforce an arbitration

agreement that is otherwise valid under §2 of the FAA and

would directly conflict with the Court’s directive that “the

Arbitration Act ‘provides no basis for disfavoring agreements

to arbitrate statutory claims by skewing the otherwise hos-

pitable inquiry into arbitrability.”” McMahon, 482 U.S., at

226 (internal citations omitted); see also Moses H. Cone

Mem’! Hosp., 460 U.S., at 22-23 & n.27; Prima Paint, 388

U.S., at 404..

These kinds of disputes should be and are best resolved by

the arbitrator in the first instance. The parties contractually

committed to allow an arbitrator to resolve the merits of their

disputes and award any appropriate remedy that is authorized

under the applicable law and in accordance with the arbi-

tration agreement. The arbitrator should resolve challenges to

remedial limitations because, in addition to the fact that the

parties agreed to it, only the arbitrator can determine on a

complete record what, if any, remedies would be appropriate.

Inquiring into the potential availability of a particular remedy

before the arbitrator has made any determination that the

claimant might be entitled to that remedy is purely con-

jectural and cannot properly justify blocking arbitration of the

claim altogether.’ Instead, once the court determines that the

parties have agreed to arbitrate the claim, the court should

defer to the arbitrator’s role in initially interpreting the terms

of the arbitration agreement and applying the controlling law

in light of the entire arbitration record.

9 Indeed, the review undertaken by the district court in this case was far

more speculative than the weakness alleged in the arbitration agreement in

Green Tree. See 531 U.S., at 91. The damage limitation provisions used

as the basis for excusing respondents from arbitration would have become

relevant only if: (1) petitioners did not waive their reliance on the

provisions; (2) the arbitrator ruled in respondents’ favor; (3) the parties

did not settle the dispute; and (4) the arbitrator declined to treble the

damages.

The Court for this reason has previously declined to

speculate on whether or how provisions in the parties’

arbitration agreement would somehow affect the plaintiff's

ability to prosecute or recover on her claim in arbitration and

has left those questions to the arbitrator in the first instance.

In Mitsubishi, for example, the Court expressly declined to

consider at the motion-to-compel stage a claim that the

arbitral panel could potentially apply the wrong law and,

accordingly, affect the plaintiff's prosecution of its antitrust

claims. 473 U.S., at 637 n.19. The Court recognized that the

potential choice-of-law questions were outside the confines of

the limited test for arbitrability and, therefore, were for the

arbitrator to address in the first instance with the possibility

for review by the court at the award-enforcement stage:

“We therefore have no occasion to speculate on [the law

to be applied by the arbitral panel] at this stage in the

proceedings, when Mitsubishi seeks to enforce the

agreement to arbitrate, not to enforce an award . . . [T]he

national courts of the United States will have the

opportunity at the award-enforcement stage to ensure

that the legitimate interest in the enforcement of the

antitrust laws has been addressed.” /d., at 637 n.19, 638.

Building on Mitsubishi, the Court in Vimar Seguros

continued to distinguish between the narrow review permitted

before arbitration and the broader postarbitration review in

order to define those issues that should be left to the arbitrator

in the first instance. Questions regarding what law will apply

are to be “decided in the first instance by the arbitrator.” 515

U.S., at 541. The Court specifically declined to speculate at

the motion-to-compel stage about “what law the arbitrators

will apply to petitioner’s claims,” or about whether

“petitioner will receive diminished protection” as a result of

the choice-of-law decision. /d., at 540. Those issues were

“premature” because “[rjespondents seek only to enforce the

arbitration agreement” and the lower court would have the

““opportunity at the award-enforcement stage to ensure that

the legitimate interest in the enforcement of the . . . laws has

been addressed.’” /d. (quoting Mitsubishi, 473 U.S., at 638).

By limiting its consideration at the motion-to-compel stage

to issues related to the making and scope of the arbitration

agreement, and by refraining from considerations of whether

and to what extent provisions in an agreement may affect the

parties’ rights and remedies in arbitration, a court does more

than just pay lip service to the “emphatic federal policy in

favor of arbitral dispute resolution”; rather, it advances that

policy and, in turn, satisfies the goals of the FAA. See

Mitsubishi, 473 U.S., at 631. By contrast, when a court

undertakes to evaluate the validity or effect of a provision of

the parties’ substantive agreement, the court usurps the role of

the arbitrator and deprives the parties of the contractual

bargain that the FAA was intended to protect. See W.R.

Grace & Co. v. Rubber Workers, 461 U.S. 757, 764-65

(1983) (parties to an arbitration agreement have bargained to

have the arbitrator interpret the contract); Enter. Wheel & Car

Corp., 363 U.S., at 599 (same). Even if the arbitrator is free

to reinterpret the contractual provisions as part of a

subsequent arbitration, the parties will have already litigated

in court issues central to the dispute and will have lost forever

the efficiency and cost-effectiveness that were part of the

arbitration bargain. See Mitsubishi, 473 U.S., at 633 (“[I)t is

often a judgment that streamlined proceedings and expe-

ditious results will best serve their needs that causes parties to

agree to arbitrate their disputes.”).

In addition to improperly substituting the court’s judgment

for that of the arbitrator, the district court’s prearbitration

merits review of the parties’ damage limitation provisions

expresses, at minimum, a “general suspicion of . . . the

competence of arbitral tribunals.” McMahon, 482 U.S., at

231. That suspicion is dramatically revealed in the district

court’s conclusion that the unavailability of punitive damages

would preclude respondents from effective vindication of

their substantive RICO rights in arbitration. That conclusion

improperly presumed, first, that the district court was better

suited than the arbitrator to interpret the scope of the parties’

agreement to limit punitive damages and, second, that the

arbitrator would be unable or unwilling to correctly interpret

and apply the law to the parties’ agreement. It was neither

factually credible nor legally permissible for the district court

to prognosticate that the arbitrator would not follow

controlling law, particularly since all of the arbitration

agreements in this case «xpressly instruct the arbitrator to

follow the law. J.A.84, 106-07, 146-47, 168, 212. This Court

has repeatedly declined to presume that arbitrators will be

incompetent or unwilling to decide the issues placed before

them. See Gilmer, 500 U.S., at 30; Mitsubishi, 473 U.S., at

634. “[W]e have indicated that there is no reason to assume

at the outset that arbitrators will not follow the law; although

judicial scrutiny of arbitration awards necessarily is limited,

such review is sufficient to ensure that arbitrators comply

with the requirements of the statute.” McMahon, 482 U.S., at

232; see also Gilmer, 500 U.S., at 32 n.4 (same).

That distrust of the arbitral process improperly led the

district court to perform a prearbitration substantive analysis

that is both premature and more intrusive than the

postarbitration judicial review contemplated by §§10 and 11

of the FAA. Issues of how provisions in an arbitration

agreement may affect the parties’ rights and remedies in

arbitration are outside the scope of a court’s motion-to-

compel inquiry; they are appropriate for judicial review only

at the award-enforcement stage after the arbitrator has

addressed them in the first instance.'° See Mitsubishi, 473

'° The Court has previously suggested that, on postarbitration review, it

would have little hesitation condemning as against public policy

agreements whose provisions operate to foreclose completely a party’s

U.S., at 637 n.19; see also John Wiley & Sons, 376 US., at

557.'' When parties agree to resolve disputes in an arbitral

forum, the parties’ bargain is not merely to forgo a judicial

forum in favor of an arbitral one in the first instance, but

necessarily also to conform the scope of judicial review of the

arbitral award to the standards provided for in the FAA. See

9 U.S.C. §§10-11; First Options, 514 U.S., at 942; cf. Gilmer,

500 U.S., at 31 (“[B]y agreeing to arbitrate, a party ‘trades the

procedures and opportunity for review of the courtroom for

the simplicity, informality, and expedition of arbitration.””)

(quoting Mitsubishi, 473 U.S., at 628). In the face of a valid

agreement to arbitrate, that review should occur only after the

parties have gone through the arbitration for which they have

bargained. See, e.g., McMahon, 482 U.S., at 242 (plaintiffs,

ability to pursue statutory remedies (as opposed to when remedies may

still be available but could simply be affected by the terms of the

agreement). See Mitsubishi, 473 U.S., at 637 n.19; Vimar Seguros, 515

U.S., at 540. That dictum is consistent with a court’s authority to refuse

to enforce foreign judgments that offend “the public policy of the United

States.” 1 RESTATEMENT (THIRD) OF FOREIGN RELATIONS LAW OF THE

UNITED STATES §482(2)(d); Convention on the Recognition and

Enforcement of Foreign Arbitral Awards, art. V(2)(b), 21 U.S.T. 2517.

'! In John Wiley & Sons, effectively anticipating the Mitsubishi test for

arbitrability, the Court acknowledged the limitations on its authority under

the Labor Management Relations Act at the motion-to-compel stage:

“Once it is determined, as we have, that the parties are obligated to

submit the subject matter of a dispute to arbitration, ‘procedural’

questions which grow out of the dispute and bear on its final

disposition should be left to the arbitrator. Even under a contrary

rule, a court could deny arbitration only if it could confidently be

said not only that a claim is strictly ‘procedural,’ and therefore

within the purview of the court, but also that it should operate to bar

arbitration altogether, and not merely limit or qualify an arbitral

award.” 376 U.S., at 557-58.

“having made the bargain to arbitrate” their RICO claims,

would “be held to their bargain”). '?

Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S.

52 (1995), confirms that there is no need for a district court to

conduct prearbitration review of available remedies. On

postarbitration review, the Court examined a lower court

decision vacating in part an arbitration award that included

punitive damages. The Court substantively reviewed the

respondents’ claims that the arbitration panel had no authority

to award punitive damages because the underlying contract

was governed by New York law, which did not permit

arbitrators to award punitive damages, and ultimately decided

that the award “should have been enforced as within the

scope of the contract.” /d., at 64. Because the Court’s review

occurred at the postarbitration stage, the Court had the

benefit of knowing not only the arbitrators’ views on the

matter, but also that the issue was ripe because the arbitrators

had in fact awarded punitive damages. See id., at 54-55. The

key to Mastrobuono, and what harmonizes it with Mitsubishi

and other prearbitration cases, is that the Court was

conducting the postarbitration inquiry contemplated by §10,

rather than the limited arbitrability review authorized by

§§2 and 4.

The Court has emphasized that postarbitration judicial

review under §§10-11 is sufficient to ensure that arbitral

decisions effectively vindicate rights available under statutes,

such as RICO, that create arbitrable claims.'? See Gilmer,

'? The district court’s pre-evaluation of what would have happened

during an arbitration is particularly troubling because the respondents in

this case have disclaimed to petitioners, the district court, and the court of

appeals any intention of arbitrating any claim that is sent to arbitration.

R.1244.1; R.1272.4-5; R.1637.1-2; Appellees’ Response to Motion for

Stay of Proceedings, at 17-18 (5/21/2001).

'* Respondents incorrectly argued that the second part of the court’s

motion-to-compel inquiry is more general: to determine “whether [any]

500 U.S., at 32 n.4; McMahon, 482 U.S., at 232 (noting that

judicial review in accordance with the FAA is “sufficient to

ensure that the arbitrators comply with the requirements of

the statute”). Adequate postarbitration review would be

available in this case. If the arbitrator concludes that the

arbitration agreements preclude an award of RICO treble

damages, then the district court could properly address during

award-enforcement proceedings whether that result violates a

cognizable public policy—with the benefit of the arbitrator’ 8

determination on the merits of respondents’ RICO claims."

Courts have been willing to invalidate an award when the

arbitrator has plainly failed to vindicate a party’s statutory

rights.'° But the district court in this case formulated its own

legal constraints external to the parties’ agreement [to arbitrate] foreclosed

the arbitration of those claims,” and argued that this language justified the

court’s review of the damage limitation provisions. Brief in Opposition to

Petition for Writ of Certiorari, at 7. That reading improperly attempts to

expand the Mitsubishi test by substituting any external “constraint” for the

sole focus of the Court’s review: whether there was evidence that

“Congress itself has evinced an intention to preclude a waiver of judicial

remedies for the statutory rights at issue.” Mitsubishi, 473 U.S., at 628;

see Green Tree, 531 U.S., at 90; Gilmer, 500 U.S., at 26; McMahon, 482

U.S., at 227.

'* The courts of appeals have articulated several grounds— including

the violation of public policy and the manifest disregard of the law—that

would permit a district court to subsequently vacate an arbitration award.

See Wonderland Greyhound Park, Inc. v. Autotote Sys., Inc., 274 F.3d 34,

35-36 (CAI 2002); Sheldon v. Vermonty, 269 F.3d 1202, 1206 (CAI0

2001); DBM Tech., Inc. v. Local 227, United Food & Commercial

Workers Int'l Union, 257 F.3d 651, 659-60 (CA6 2001); LaPrade v.

Kidder, Peabody & Co., Inc., 246 F.3d 702, 706 (CADC 2001);

Greenberg v. Bear, Stearns & Co., 220 F.3d 22, 27 (CA2 2000); Williams

v. Cigna Fin. Advisors Inc., 197 F.3d 752, 757-61 (CAS 1999); Scott v.

Prudential Sec., Inc., 141 F.3d 1007, 1017 (CA11 1998).

'S See, e.g., Halligan v. Piper Jaffray, Inc., 148 F.3d 197, 204 (CA2

1998) (vacating an arbitral award when arbitrators showed manifest

disregard for the law in denying a claim for damages urder the Age

Discrimination in Employment Act); Montes v. Shearson Lehman Bros.,

interpretation of the damage limitation provisions and then

proceeded to hold that the provisions, as interpreted, violated

public policy, all before any arbitration made the issues ripe

for judicial review.'°

Allowing a court to usurp the arbitrator’s role in

performing the merits review also creates an unacceptable

risk of gamesmanship and strategically motivated objections.

Before arbitration, §4 authorizes judicial intervention only

when a party allegedly “fail[s], neglect[s], or refus[es]” to

arbitrate. In the absence of a failure or refusal to arbitrate, the

dispute proceeds directly to the arbitral forum and judicial

review occurs, if at all, only after the arbitration is completed.

Parties who willingly comply with a valid arbitration

agreement get exactly what they bargained for—contractual

interpretation and dispute resolution by the arbitrator. See

W.R. Grace, 461 U.S., at 764-65. Allowing a party to obtain

substantive judicial review simply by interposing an objection

to arbitration turns the congressional policy favoring

enforcement of arbitration agreements on its head by

providing parties to valid arbitration agreements with a

Inc., 128 F.3d 1456, 1464 (CAI1 1997) (reversing district court's

affirmance of arbitration award on the basis that it manifestly disregarded

the law of Fair Labor Standards Act).

'° Even if the district court were permitted to reach the issue whether a

waiver of RICO treble damages violated public policy, and even if the

court were correct that a waiver does violate public .policy, that

determination should not have absolved respondents of their obligation to

arbitrate their RICO claims. If the arbitrator were to enter an award for a

RICO violation without having trebled the amount of compensatory

damages, on postarbitration review the district court, if required, could

easily vacate the award or modify it to comply with RICO by performing

a simple mathematical computation. See, eg, Nat'l Post Office

Mailhandlers, Watchmen, Messengers and Group Leaders Div., Laborers

Int'l Union of N. Am., AFL-CIO vy. United States Postal Serv., 75\ F.2d

834, 844-45 (CA6 1985) (directing district court on remand to enter

judgment modifying arbitration award to include back pay).

perverse incentive to breach their agreements to arbitrate.

The party who decides, in hindsight, that it prefers litigation

to arbitration gets precisely what it contractually agreed to

waive, and the other party to the arbitration agreement is

denied the benefit of its bargain. Parties should be held to

their predispute bargain to arbitrate even when, after a dispute

arises, they may regret their agreement to submit to an

arbitral forum. See First Options, 514 U.S., at 942;

McMahon, 482 U.S., at 242; Prima Paint, 388 U.S., at 404.

A number of circuits have addressed whether the validity

of a limitation on remedies in an arbitration clause should be

addressed by the district court or the arbitrator in the first

instance and have concluded, in line with the Court’s

precedent, that the decision should be made by the arbitrator

in the first instance. See Boomer-v. AT&T Corp., 309 F.3d

404, 419 n.6 (CA7 2002); Thompson v. Irwin Home Equity

Corp., 300 F.3d 88, 91-92 (CAI 2002); Metro E. Ctr. for

Conditioning & Health v. Qwest Communications Int'l, Inc.,

294 F.3d 924, 929 (CA7 2002); Arkcom Digital Corp. v.

Xerox Corp., 289 F.3d 536, 539 (CA8 2002); Larry's United

Super, Inc. v. Werries, 253 F.3d 1083, 1086 (CA8 2001);

MCI Telecommunications Corp. v. Matrix Communications

Corp., 135 F.3d 27, 33 n.12 (CAI 1998); Great W. Mortgage

Corp. v. Peacock, 110 F.3d 222, 228, 232 (CA3 1997); but

see Inv. Partners, LLP v. Glamour Shots Lic., Inc., 298 F.3d

314, 316 (CAS 2002); In re Humana Managed Care Litig.,

285 F.3d, at 973-74 & n.3; Graham Oil Co. v. ARCO Prods.

Co., 43 F.3d 1244, 1247-49 (CA9 1995).

The district court could not justifiably rely on the Eleventh

Circuit’s Paladino decision because the court in that case

impermissibly decided issues that should have been left to the

arbitrator in the first instance, i.e., when it held that it could

deny arbitration if the relief available in arbitration was not

“sufficiently meaningful.” See Paladino v. Avnet Computer

Techs., Inc., 134 F.3d 1054, 1060 (CAI11 1998). The district

court’s evaluation in this case whether respondents could

obtain “meaningful relief’ in their prospective arbitrations

similarly ran afoul of the limitations of §2, usurped the role of

the arbitrator, deprived the parties of the benefit of their

bargain, exhibited improper distrust for the arbitral process,

and failed to recognize the adequacy of postarbitration

review. Rather than attempting to determine whether the

arbitration agreement provided “meaningful relief’ at the

motion-to-compel stage—an analysis that should have been

foreclosed by Mitsubishi, McMahon, John Wiley & Sons, and

Gilmer—the district court should have simply sought to

determine whether the arbitration agreement itself was

revocable under §2 and then compelled arbitration of the

RICO claims."’

’ The district court also refused to compel arbitration of Dr. Kelly’s

ERISA claims, unjust enrichment claims, and claims for violation of state

prompt pay laws because of a provision in his arbitration agreement that

required arbitration to be commenced within one year after either party

notifies the other in writing of a dispute. See /n re Managed Care Litig.,

132 F.Supp.2d, at 1001. The district court improperly construed this

diligent-prosecution requirement as an impermissible “one year statute of

limitations” on Dr. Kelly’s claims that excused him from arbitrating his

ERISA and other statutory claims, see id, although the court also

inconsistently stated that it was “not persuaded that the statute of

limitations provision is a strong enough factor, on its own, to overcome

the FAA’s strong presumption in favor of arbitration,” and ordered

arbitration of Keily’s contractual claims. /d. Apparently recognizing this

impropriety, the district court later issued an order to Dr. Kelly to show

cause why the district court should not reverse its position and compel Dr.

Kelly to arbitrate his state prompt pay claims. R.1199.3-5. Assuming,

arguendo, that Dr. Kelly’s arbitration agreement did contain an

impermissible one-year statute of limitations provision on claims brought

in arbitration, the district court should have compelled Dr. Kelly to

arbitrate his ERISA, unjust enrichment, and state prompt pay claims for

the very same reasons that it should have ordered arbitration of the RICO

claims. Once the district court determined that Dr. Kelly entered into an

agreement to arbitrate ERISA, unjust enrichment, and state prompt pay

claims, and further determined that the ERISA statute did not preclude a

Il. THE DAMAGE LIMITATION PROVISIONS

COULD NOT JUSTIFY EXCUSING

RESPONDENTS FROM ARBITRATING THEIR

RICO CLAIMS.

Even if the district court could have properly reviewed the

validity of the restriction on punitive damages found in the

physicians’ respective arbitration agreements, the court still

erred in its interpretation and application of the provisions. In

ruling that respondents’ RICO claims were exempt from

arbitration, the district court first interpreted the provisions

limiting punitive damages strictly to prohibit treble damages

under RICO, held that the provisions would not allow for

meaningful relief in the arbitration, and then declared that the

entire arbitration agreement would not be enforced in

connection with the physicians’ RICO claims. See In re

Managed Care Litig., 143 F.Supp.2d, at 1375; Jn re Managed

Care Litig., 132 F.Supp.2d, at 1000-01. With or without the

damage limitation provisions, respondents can enforce their

RICO rights in arbitration, and the RICO claims should have

been sent to arbitration.

waiver of judicial rights, then the district court should have compelled

these claims to arbitration, leaving to the arbitrator to decide in the first

instance whether Dr. Kelly’s arbitration agreement contained an

impermissible one-year statute of limitations. Subsequent to the district

court's refusal to compel arbitration of Dr. Kelly’s unjust enrichment

claim, respondents attempted to waive this claim, and requested the court

of appeals to stay the unjust enrichment claim. See Appellees’

Consolidated Reply Brief, at 34 n.9 (6/4/2001). The court of appeals did

not stay the unjust enrichment claim and it improperly refused to compel

Dr. Kelly to arbitrate his unjust enrichment claim. See /n re Humana

Managed Care Litig., 285 F.3d, at 973-74.

A. A Limitation on Punitive Damages Does Not

Prevent an Award of RICO Treble Damages.

The lower courts refused to compel arbitration of

respondents’ RICO claims because they incorrectly construed

the language in the arbitration agreements restricting the

arbitrator’s ability to award “punitive” damages as

encompassing RICO treble damages. But the district court’s

determination that RICO treble damages are “a form of

punitive damages,” id., at 1001, does not accurately reflect

the purposes of RICO treble damages and should not have

served as a basis for disregarding both the damage limitation

and the agreement to arbitrate itself (at least as to the RICO

claims). Statutory treble damages are not themselves punitive

damages in the ordinary sense of the term, and RICO

legislative history and the substantial differences between

statutory treble damages and traditional punitive damages

confirm that RICO treble damages should not be considered

“punitive damages” within the context of the arbitration

agreements. Even if there were some uncertainty about how

the term should be interpreted, that. uncertainty should have

been resolved in favor of arbitration. See Moses H. Cone

Mem 'l Hosp., 460 U.S., at 24-25 (obligating district courts to

resolve “any doubts concerning the scope of arbitral issues

... in favor of arbitration, whether the problem at hand is the

construction of the contract language itself or an allegation of

waiver, delay, or a like defense to arbitrability”); see also

Volt, 489 U.S., at 476 (same).'*

The term “punitive damages” that appears in the arbitration

agreements is a familiar term that generally describes a

category of common-law damages independently awarded to

'® That is particularly true in light of United’s concession below that—

because United does not believe that RICO treble damages are punitive

damages— it would not assert the damage limitation provisions to bar an

award of RICO treble damages in arbitration. R.582.14-16.

punish a defendant for its conduct. See Molzof v. United

States, 502 U.S. 301, 306 (1992) (“‘Punitive damages’ is a

legal term of art that has a widely accepted common-law

meaning.”). Treble damages, on the other hand, are a

statutorily created category of damages that serve disparate

purposes and whose nature and practice differ significantly

from common-law punitive damages. See /nv. Partners, 298

F.3d, at 317. RICO treble damages are not within the

common-law meaning of the term of art “punitive damages.”

See Molzof, 502 U.S., at 306.

Moreover, multiple damages provisions in federal statutes

are also distinguishable from punitive damages because they

are not enacted primarily for punitive purposes. See BLACK’S

LAW DICTIONARY, definition of “MULTIPLE DAMAGES” (7th

ed. 1999) (citing DAN B. Dospss, LAW OF REMEDIES §3.12, at

359 (2d ed. 1993)) (“[MlJultiple damages statutes may be

enacted for entirely non-punitive purposes.”). That is true of

RICO treble damages. See Liquid Air Corp. v. Rogers, 834

F.2d 1297, 1310 n.8 (CA7 1987) (“Although there is some

sense in which RICO treble damages are punitive, they are

largely compensatory in the special sense that they ensure

that wrongs will be redressed in light of the recognized

difficulties of itemizing damages.”); accord Aetna Cas. Sur.

Co. v. P&B Autobody, 43 F.3d 1546, 1572 (CAI 1994) (“It

may reasonably be argued . . . that RICO damages are

primarily compensatory in nature.”); see also Carter v.

Berger, 777 F.2d 1173, 1175-76 (CA7 1985).

Indeed, it is clear from the legislative history of RICO’s

treble damages provision—on which the Court relied in

McMahon—that it was enacted for “non-punitive purposes”

and should not have been defined as punitive damages in

interpreting the arbitration agreements. In McMahon, the

Court observed that the legislative history of §1964(c) reveals

an “emphasis on the remedial role of the treble damages

provision.” 482 U.S., at 241. “This focus on the remedial

function of §1964(c),” the Court added, “is reinforced by the

recurrent references in the legislative debates to §4 of the

Clayton Act as the model for the RICO treble-damages

provision.” /d., at 241 (citing 116 CONG. REC. 35,346); see

also S. Rep. No. 91-617, at 81-82 (1969) (stating that RICO

was not intended “to visit punishment on any individual” or

to be “penal”); Judith A. Morse, Note, Treble Damages

Under RICO: Characterization and Computation, 61 NOTRE

DAME L. REV. 526, 547 (1986) (“Congress intended treble

damages not as a means for punishing the defendant, but as a

remedy for the plaintiff.”). The legislative history was cited

in McMahon, along with an analogy to the antitrust laws, in

support of what the Court called “the priority of the

compensatory function of [the treble damages provision] over

its deterrent function.” McMahon, 482 U.S., at 240.

Without strong evidence that Congress actually enacted

RICO treble damages primarily as a form of punitive

damages, it was improper for the district court simply to

assume that it was so for the purpose of holding that the

provision could not properly be applied to respondents’ RICO

claims, especially when that conclusion then formed the basis

for releasing respondents from their obligation to arbitrate

their RICO claims altogether. Even if the Court were to

determine that RICO treble damages have a punitive

component, as the Court has done in some other treble

damages contexts,’ “they are not ‘punitive’ for purposes of

interpreting the scope of an arbitration clause.” Inv. Partners,

298 F.3d, at 318 (holding that “the prohibition in the parties’

arbitration agreement against awarding ‘punitive damages’

does not extend to statutory treble damages’’).

'? See, e.g., Vermont Agency of Natural Res. v. United States ex rel.

Stevens, 529 U.S. 765, 785-86 (2000) (stating that the treble damages and

civil penalties authorized by the False Claims Act are “essentially punitive

in nature’’).

Although the district court in this case recognized the

Court’s rulings requiring that arbitration agreements be

construed generously in favor of arbitration, see /n re

Managed Care Litig., 132 F.Supp.2d., at 993 (citing Moses H.

Cone Mem’! Hosp., 460 U.S., at 24; Mitsubishi, 473 US., at

625-26), it nevertheless interpreted the term “punitive

damages” in the arbitration agreements unnecessarily broadly

in order to bar arbitration. Given this Court’s recognition of

Congress’s strong expression that RICO treble damages are

not primarily punitive and the inherent differences between

RICO’s statutory treble damages and punitive damages, at the

very least there are serious doubts regarding whether RICO

treble damages should be considered “punitive damages

within the scope of the arbitration agreements. Those doubts

should have required the lower courts to interpret the damage

limitation provisions in the arbitration agreements so as to

preserve the parties’ agreement to arbitrate their disputes. See

Warrior & Gulf Nav. Co., 363 U.S., at 582-83 (stating that a

dispute should be arbitrated “unless it may be said with

positive assurance that the arbitration clause is not susceptible

of an interpretation that covers the asserted dispute”).

B. The Limitation on “Extracontractual Dam-

ages” in Dr. Porth’s Arbitration Agreement

Does Not Impermissibly Limit RICO Treble

Damages.

The district court refused to compel arbitration of Dr.

Porth’s RICO claims after concluding that he could not

recover RICO treble damages in arbitration because his

arbitration agreement prohibits the arbitrator from awarding

“extracontractual damages, including punitive or exemplary

damages.” See In re Managed Care Litig., 132 F.Supp.2d, at

1000. The court erred, however, in reading the “extra-

contractual damages” limitation as a general bar on any

damages other than for breach of contract, rather than a

specific limitation on breach-of-contract damages. The

limitation on “extracontractual damages” serves merely as a

limit on the arbitrator’s ability to award non-economic

damages, such as punitive damages, and would not, for the

reasons stated above, bar an award of RICO treble damages.

See DAN B. Dosss, LAW OF REMEDIES §12.1(1), at 753 (2d.

ed. 1993) (“Punitive damages and mental anguish damages

are thus considered ‘extracontractual,’ and usually denied in

pure contract cases.”); Barnes v. Gorman, 122 S.Ct. 2097,

2102 (2002) (“punitive damages, unlike compensatory

damages and injunction, are generally not available for

breach of contract”).”°

The limitation on extracontractual damages does not

prevent Dr. Porth from asserting claims against United in

arbitration; it merely represents the parties’ mutual agreement

to limit any damages to expectancy-type damages under their

contractual relationship. Again, the parties were entitled to

arrange their contractual affairs as they saw fit, and the courts

should not, in the absence of express congressional intent, bar

the application of an express waiver of statutory rights.

C. The Damage Limitation Provisions Are an

Enforceable Part of the Parties’ Contractual

Agreements.

Even if the Court de“ermines that the damage limitation

provisions in the arbitration agreements must be interpreted

* The lower courts concluded that this “prohibition on extracontractual

damages is precisely the type of arbitration agreement that was found

unenforceable in Paladino.” In re Managed Care Litig., 132 F.Supp.2d,

at 1000. In fact, the Paladino arbitration clause was dramatically different

because it authorized the arbitrator “to award damages for breach of

contract only,” see Paladino, 134 F.3d, at 1056, and thus was interpreted

to restrict the party to a single cause of action. Dr. Porth’s arbitration

agreement, by contrast, merely limits him to expectancy-type damages

and bars punitive damages, but does not limit the kinds of claims Dr.

Porth could assert against United.

as a bar to RICO treble damages, that limitation was valid and

enforceable and could not justify releasing respondents from

their obligation to arbitrate their disputes with petitioners. As

sophisticated actors,” respondents were free to contract and

structure their arbitration agreements according to their busi-

ness needs, including a mutual waiver of punitive damages.

Physicians may find themselves facing the possibility of an

award of punitive damages when they are accused of

submitting fraudulent claims, and it was eminently reasonable

for both parties to bilaterally agree to waive the right to assert

punitive damages in arbitration. Prior to Mastrobuono,

several circuits permitted parties to contractually waive

punitive damages and have subsequently relied on Mastro-

buono to support that conclusion. See, e.g., Inv. Partners,

298 F.3d, at 318 n.1 (finding that “[p]rovisions in arbitration

agreements that prohibit punitive damages are generally

enforceable”) (citing Mastrobuono, 514 U.S., at 56-57);

Bowen v. Amoco Pipeline Co., 254 F.3d 925, 939-40 (CA10

2001); Long v. Silver, 248 F.3d 309, 319 (CA4 2001); MCI

Telecommunications Corp. v. Matrix Communications Corp.,

135 F.3d 27, 33 n.12 (CAI 1998); Baravati v. Josephthal,

Lyon & Ross, Inc., 28 F.3d 704, 709-10 (CA7 1994);

Raytheon Co. v. Automated Bus. Sys., Inc., 882 F.2d 6, 12

(CAI 1989); Surman v. Merrill, Lynch, Pierce, Fenner &

Smith, 733 F.2d 59, 63 (CA8 1984).”

2! The district court expressly found as a factual matter that the parties

to this dispute are sophisticated actors. See In re Managed Care Litig.,

132 F.Supp.2d, at 998.

22 A few state courts have at least arguably indicated a contrary view.

As of the date of filing of this brief, at least one petition is pending before

the Court seeking to resolve a claimed conflict between the near-uniform

view of the federal courts that waivers of punitive damages are

enforceable and the contrary view of a state court. See Friedman's Inc. v.

West Virginia ex rel. Dunlap, No. 02-315, 71 U.S.L.W. 3163 (filed Aug.

27, 2002).

The Court has repeatedly emphasized the presumption that

parties may voluntarily waive constitutional~ and statutory’

rights and remedies by agreement.”* See New York v. Hill,

ape 110, “y (2000) (“We have ... in the context of a

ad array of ccnstitutional and statutory visions,

articulated a general rule that presumes the availability of

waiver . . . .”) (internal quotation marks omitted); United

States v. Mezzanatto, 513 U.S. 196, 200-01 (1995) (stating

that “[rjather than deeming waiver presumptively unavailable

absent some sort of express enabling clause, we instead have

adhered to the opposite presumption”) (citing Shutte v.

Thompson, 82 U.S. 151, 159 (1872) (providing that “a party

may waive any provision, either of a contract or of a statute

intended for his benefit”)). Without an affirmative indication

” In United States v. Mezzanatto, $13 U.S. 196, 201

stated that “[a] criminal defendant may knowingly and nn a

many of the most fundamental protections afforded by the Constitution.”

See, é.g., Schneckloth v. Bustamonte, 412 U.S. 218, 248-49 (1973) (hold-

ing that a person may consent to an unreasonable search and seizure):

Boykin v. Alabama, 395 U.S. 238, 243 (1969) (permitting waiver of right

to jury trial, right of confrontation, and privilege against self-incrim-

ination); Johnson v. Zerbst, 304 U.S. 458, 465 (1938) (holding that a

person may waive right to counsel).

See, e.g., NLRB v. Allis-Chalmers Mfg. Co., 388 U.S.

(0007) Gueelting Gen “0 exten ey een tata omy Sn exetnatn

right to strike during the contract term, and his right to refuse to cross a

lawful picket line”); United States v. Khattak, 273 F.3d 557, 561 (CA3

2001) oo mee of appeal under 18 U.S.C. §3742 (1994), and

stating to waive ri ... logi

the ability to waive constitutional tery Apia ae aoa

* Due process rights to notice and hearing prior to civil judgment are

also subject to waiver. See D.H. Overmeyer Co. v. Frick Co., 405 U.S.

174, 185 (1972) (quoting Nat'l Equip. Rental, Lid. v. Szukhent, 375 U.S

311, 315-16 (1964)) (“I}t is settled ... that parties to a contract may

agree in advance to submit to the jurisdiction of a given court, to permit

notice to be served by the opposing party, or even to waive notice

altogether.”) (alteration in original).

of congressional intent to the contrary, “statutory provisions

are subject to waiver by voluntary agreement of the parties.

Mezzanatto, 513 U.S.., at 201.

These principles apply with equal force to arbitration

agreements, given Congress’s and the Court’s emphasis on

giving full effect to the parties’ intent. See Volt, 489 U;S., at

479 (“Arbitration under the [FAA] is a matter of consent, not

coercion, and parties are generally free to structure their

arbitration agreements as they see fit.”); Davis v. Prudential

Sec., Inc., 59 F.3d 1186, 1193 (CAI1 1995) (“[A]n agreement

to arbitrate is equivalent to voluntarily entering into a

contract, the terms of which the parties are free to specify.”)

(citing Baravati, 28 F.3d, at 709) (“[S}hort of authorizing trial

by battle or ordeal or, more doubtfully, by a panel of three

monkeys, parties can stipulate to whatever procedures they

want to govern the arbitration of their disputes; parties are as

free to specify idiosyncratic terms of arbitration as they are to

specify any other terms in their contract.”). And, “[hjaving

made the bargain to arbitrate, . . . part[ies] should be held to it

unless Congress itself has evinced an intention to preclude a

waiver of judicial remedies for the statutory rights at issue.”

Mitsubishi, 473 U.S., at 628.

When congressional intent to preclude waiver is not made

abundantly clear, the Court has allowed parties to waive

statutory rights and remedies. In Evans v. Jeff D., 475 U.S.

717, 719-20 (1986), the respondents contested the waiver of a

statutory eligibility for attorney’s fees under the Civil Rights

Attorney’s Fees Awards Act of 1976 contained in a

settlement agreement. The Court found no support in the

Act’s text or legislative history to preclude waiver, but did

explain its findings: aS"

“{Njowhere [does the legislative history] suggest that

Congress intended to forbid all waivers of attorney's

fees .. . . Congress . . . neither bestowed fee awards

upon attorneys nor rendered them nonwaivable or

nonnegotiable; instead, it added them to the arsenal of

remedies available.” /d., at 731-32 (citing S. Rep. No. -

94-1011, at 5 (1976), reprinted in 1976 U.S.C.C.A.N.

5912). |

The Court has invalidated waivers of statutory rights and

remedies only in narrow circumstances when Congress has

clearly demonstrated an intent, most often in the statute’s text

or legislative history, to forbid waivers. See, e.g., Oubre v.

Entergy Operations, Inc., 522 U.S. 422, 426-28 (1998)

(invalidating waiver of Age Discrimination in Employment

Act claims when signed waiver failed to conform with the

specific requirements of the Older Workers Benefit

Protection Act). In the RICO context, however, no congres-

sional policy demands invalidation of a waiver of treble

dafhages agreed to by sophisticated parties. Congress has not

expressed any intent to prevent waiver of RICO treble

damages, and respondents were not coerced or subjected to

any improper disadvantage. To the contrary, nothing in either

the text or the legislative history of RICO, including its treble

damages provision, provides any basis to suggest that

individuals cannot agree to waive its remedies.

If anything, the legislative history of the RICO treble

damages provision in particular supports the conclusion that

waiver would not thwart any articulated legislative policy.

The treble damages provision was added late in the legislative

process without extensive deliberation, and the version of the

bill that passed the Senate, S. 30, was limited to injunctive

remedies and did not contain the treble damages provision.

See Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 487 (1985);

116 CONG. REC. 972 (1970). The Senate had rejected earlier

versions of the bill that did contain the treble damages

provision in identical form. See Sedima, 473 U.S., at 487

(citing S. 1623, 91st Cong., Ist Sess., §4(a) (1969); S. 2048,

S. 2049, 90th Cong., Ist Sess. (1967)). The treble damages

provision now contained in §1964(c) was added to S. 30 in

the House relatively late in the legislative process on the

recommendation of the American Bar Association. See

Organized Crime Control Act: Hearings on S. 30 Before

Subcomm. No. 5 of the House Comm. on the Judiciary, 9\st

Cong., 2nd Sess., at 543-44 (1970) (seeking to add “an

amendment to include the additional civil remedy of

authorizing private damage suits based upon the concept of

Section 4 of the Clayton Act”). Following the passage of

S.30 as amended in the House, see 116 CONG. REC. 35,363-

64 (1970), the Senate adopted the bill that contained the

treble damages provision without seeking a conference. See

Sedima, 473 US., at 488 (citing 116 CONG. REC. 36,296

(1970)). In all of these proceedings, there is no mention

whatsoever of any effort to preclude the waiver of any

remedies under RICO.

Recognizing the absence of any congressional intent to

preclude waiver of RICO treble damages, the courts of

appeals have uniformly enforced arbitration clauses with

forum selection clauses that effectively waived recovery of

RICO treble damages by agreeing to resolve their claims in

countries without similar RICO laws. See Roby v. Corp. of

Lloyd’s, 996 F.2d 1353, 1366 (CA2 1993) (“That RICO

provides treble damages and seeks to deter persistent

misconduct does not dissuade us from our view that the

[plaintiffs’] contract clauses must be enforced.”); Lipcon v.

Underwriters at Lloyd's, London, 148 F.3d 1285, 1299 n.20

(CAI11 1998); Richards v. Lloyd's of London, 135 F.3d 1289,

1296 (CA9 1998) (en banc); Bonny v. Soc'y of Lloyd's, 3

F.3d 156, 159-61 (CA7 1993).

The arbitration agreements addressed in Roby and the

related cases represented a sweeping waiver of all RICO

remedies, yet the courts nevertheless held that private parties

could voluntarily waive their right to any RICO remedies. As

sophisticated commercial actors, the parties in this case were

free to determine what remedies would potentially be

available in arbitration. Because the damage limitation

provisions in this case are far less expansive and potentially

apply only to RICO treble damages, respondents will still be

able to pursue RICO causes of action in arbitration and, if

they prevail, recover “the damages [they] sustain[ed] and the

cost of the suit, including a reasonable attorney’s fee,” under

§1964(c). If the parties’ arbitration agreements must be

construed to bar an award of RICO treble damages in

arbitration, then it necessarily follows that the parties

reasonably and properly agreed that untrebled compensatory

damages would be adequate in arbitration.”°

By invalidating the parties’ contractual damage limitation

provisions and holding the arbitration agreements

unenforceable as to respondents’ RICO claims, the lower

courts improperly overreached their authority to review

arbitration agreements and contradicted not only

congressional intent establishing a “liberal federal policy

favoring arbitration agreements,” Moses H. Cone Mem’l

Hosp., 460 U.S., at 24, but also the ability of parties to

*° The Court has remarked that, “by agreeing to arbitrate a statutory

claim, a party does not forgo the substantive rights afforded by the statute;

it only submits to their resolution in an arbitral, rather than a judicial,

forum.”” Gilmer, 500 U.S., at 26 (quoting Mitsubishi, 473 U.S., at 628);

accord Waffle House, 534 U.S., at 295-96 n.10. A party may agree to

limit statutory remedies as part of a valid agreement to arbitrate, and a

party who does so still enjoys the statute’s substantive protections. The

Eleventh Circuit’s contrary rule, that “the arbitrability of [statutory]

claims rests on the assumption that the arbitration clause permits relief

equivalent to court remedies,” Paladino, 134 F.3d, at 1062, would require

a special exception in the arbitration context to the rule that parties may

validly contract to relinquish statutory rights. Such an arbitration-specific

exception would be wholly anomalous given that “parties are generally

free to structure their arbitration agreements as they see fit” under the

FAA, Volt, 489 U.S., at 479, and the exception would offend the most

basic objective of the FAA—“to place ‘{aJn arbitration agreement . . .

upon the same footing as other contracts, where it belongs.’” Southland

Corp., 465 U.S., at 16 (quoting H.R. REP. NO. 68-96, at | (1924)).

contract freely (both to resolve disputes in arbitration and to

waive statutory protections). See Hill, 528 U.S., at 114; Volt,

489 U.S., at 479.77

D. Even if the Damage Limitation Provisions Are

Unenforceable, Respondents’ RICO Claims

Were Stil! Arbitrable.

Finally, even if the district court could correctly review the

damage limitation provisions of the arbitration agreements

and correctly ruled that the parties could not agree to waive

RICO treble damages in arbitration, the court still should not

have excused respondents from arbitrating their RICO claims.

By doing so, the district court strongly contradicted the

federal policy favoring arbitration established by §2. See

Moses H. Cone Mem’! Hosp., 460 U.S., at 24 (“Section 2 [of

the FAA] is a congressional declaration of a liberal federal

policy favoring arbitration agreements. . . .”).

If the district court believed that the damage limitation

provisions could not be applied to respondents’ RICO claims,

the court could have easily enforced the arbitration

agreements without any limitation on respondents’ claims for

treble damages under RICO. Both Dr. Porth’s and Dr.

Kelly’s arbitration agreements expressly provide that the

arbitrator “shall be bound by controlling law.” J.A.168, 212.

Dr. Book’s and Dr. Breen’s agreements similarly state that

“(t]he arbitrator shall not have the power to commit errors of

law or legal reasoning.” J.A.84, 146. If RICO is interpreted

to categorically prohibit any contractual waiver of treble

2? Respondents also have alleged in their complaint that petitioners are

civilly liable under 18 U.S.C. §2 because they aided and abetted violations

of RICO. The question of whether a private party can waive rights under

18 U.S.C. §2 is simple: A private party cannot enforce 18 U.S.C. §2 ina

civil proceeding, see Central Bank of Denver v. First Interstate Bank of

Denver, 511 U.S. 164, 190-91 (1994), so nothing in that statute, its

legislative history, or its purpose could restrict a private party’s waiver of

its provisions.

damages claims, then an arbitrator would be bound to apply

that law even in the face of the parties’ agreement to the

contrary. Thus, notwithstanding the parties’ damage

limitation provisions, the arbitrator would be not only

empowered but actually required to award treble damages if

RICO liability is established. In light of this obligation, there

was no justification for undermining the parties’ agreement to

arbitrate respondents’ RICO claims, or for assuming that the

arbitrator would not properly apply controlling law.

In any event, even if the district court believed that the

damage limitation provisions were unenforceable against

respondents’ RICO claims, the court should have enforced

the remainder of the parties’ arbitration agreement because

the clauses could have been severed from the arbitration

agreements without rendering the agreements meaningless.

See, e.g., Gannon v. Circuit City Stores, Inc., 262 F.3d 677,

682 (CA8 2001) (“[I]f we were to_hold entire arbitration

agreements unenforceable every time a particular term is held

invalid, it would discourage parties from forming contracts

under the FAA and severely chill parties from structuring

their contracts in the most efficient manner for fear that minor

terms eventually could be used to undermine the validity of

the entire contract. Such an outcome would represent the

antithesis of the ‘liberal policy favoring arbitration

agreements.’”) (quoting Moses H. Cone Mem’! Hosp., 460

U.S., at 24); Quiller v. Barclays American/Credit, Inc., 764

F.2d 1400, 1402 (CA11 1985) (provisions of contract held to

be contrary to federal regulations severable if contract would

not be rendered meaningless); Vineberg v. Brunswick Corp.,

391 F.2d 184, 186 (CAS 1968) (stating that it is a “well

known principle of contract law that an illegal contract

provision, or one contrary to public policy, when invalidated,

will be severed from the remainder of the contract if it is

possible to do so without leaving the remainder of the

contract meaningless”). In the arbitration context, courts

have severed provisions from arbitration agreements that

otherwise would have rendered the agreement unenforceable.

See, e.g., Herrington v. Union Planters Bank, N.A., 113

F.Supp.2d 1026, 1033 (S.D. Miss. 2000) (citing Jones v.

Fujitsu Network Communications, Inc., 81 F.Supp.2d 688,

693 (N.D.-Tex. 1999)).

The essential terms of the arbitration agreements

demonstrate the desire and intent of the parties to arbitrate all

disputes arising out of their “business relationship” or

“agreement.” J.A.84, 106, 146, 168, 212. The inclusion of

the damage limitation provisions clearly was ancillary to the

primary intent of the parties to submit all disputes to

arbitration and to avail themselves of the significant benefits

of the arbitration forum. See Coddington Enters., Inc. v.

Werries, 54 F.Supp.2d 938, 940 (N.D. Mo. 1999) (citing

Zechman v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 742

F.Supp. 1359, 1364 (N.D. Ill. 1990) (“to the extent the court

can infer that the essential term of the provision is the

agreement to arbitrate, that agreement will be enforced

despite the failure of one of the terms of the bargain”)).

If the damage limitation provisions could not be validly

applied to respondents’ RICO treble damages claims, then

severance of offending provisions would have been the best,

and perhaps the only, way to reconcile the parties’ agreement

to arbitrate with the strong federal policy favoring

enforcement of arbitration agreements. See Moses H. Cone

Mem’! Hosp., 460 U.S., at 24-25 (“[A]s a matter of federal

law, any doubts concerning the scope of arbitrable issues

should be resolved in favor of arbitration.”). Respondents

have not asserted, and could not assert, that they would not

have agreed to an arbitration agreement without a damage

limitation provision. See Gannon, 262 F.3d, at 682-83

(severing a provision limiting punitive damages from an

otherwise enforceable arbitration agreement because the

severance did not affect the party’s contractual intent to

arbitrate and “excluding the provision only allows her the

opportunity to arbitrate her claims under more favorable

terms than those to which she agreed”). The parties clearly

intended to arbitrate all disputes arising out of their business

or contractual relationships, and the district court’s refusal to

enforce the arbitration agreements at issue seriously

undermines the important federal policy underlying the FAA.

CONCLUSION

For these reasons, the judgment of the court of appeals

. Should be reversed.

Respectfully submitted,

WILLIAM E. GRAUER * JAMES W. QUINN

CHRISTOPHER R. J. PACE JEFFREY S. KLEIN

COOLEY GODWARD LLP EDWARD SOTO

4401 Eastgate Mall GREGORY S. COLEMAN **

San Diego, CA 92121 WEIL, GOTSHAL & MANGES LLP

(858) 550-6000 767 Fifth Avenue

Cc lof R New York, NY 10153

for PacifiCare Health (212) 310-8000

Systems, Inc., and PacifiCare vai Counsel of Record for

Operations, Inc. UnitedHealth Group Incorporated

Counsel for Petitioners

December 6, 2002 |

STATUTORY APPENDIX

9 U.S.C. §2:

A written provision in any maritime transaction or a

contract evidencing a transaction involving commerce to

settle by arbitration a controversy thereafter arising out

of such contract or transaction, or the refusal to perform

the whole or any part thereof, or an agreement in writing

to submit to arbitration an existing controversy arising

out of such a contract, transaction, or refusal, shall

be valid, irrevocable, and enforceable, save upon such

grounds as exist at law or in equity for the revocation of

any contract.

9 U.S.C. 84:

A party aggrieved by the alleged failure, neglect, or

refusal of another to arbitrate under a written agreement

for arbitration may petition any United States district

court which, save for such agreement, would have

jurisdiction under Title 28, in a civil action or in

admiralty of the subject matter of a suit arising out of the

controversy between the parties, for an order directing

that such arbitration proceed in the manner provided for

in such agreement. Five days’ notice in writing of such

application shall be served upon the party in default.

Service thereof shall be made in the manner provided by

the Federal Rules of Civil Procedure. The court shall

hear the parties. and upon being satisfied that the making

of the agreement for arbitration or the failure to com-

ply therewith is not in issue, the court shall make an

order directing the parties to proceed to arbitration in

accordance with the terms of the agreement. The hearing

and proceedings, under such agreement, shall be within

the district in which the petition for an order directing

such arbitration is filed. If the making of the arbitration

agreement or the failure, neglect, or refusal to perform

the same be in issue, the court shall proceed summarily

to the trial thereof. If no jury trial be demanded by the

party alleged to be in default, or if the matter in dispute

is within admiralty jurisdiction, the court shall hear and

determine such issue. Where such an issue is raised, the

party alleged to be in default may, except in cases of

admiralty, on or before the return day of the notice of

application, demand a jury trial of such issue, and upon

such demand the court shall make an order referring the

issue or issues to a jury in the manner provided by the

Federal Rules of Civil Procedure, a specially call ;

jury for that purpose. If the jury fi at no agreemen

in welling for arbitration was made or that there is no

default in proceeding thereunder, the proceeding shall

be dismissed. If the jury find that an agreement for

arbitration was made in writing and that there is a default

in proceeding thereunder, the court shall make an order

summarily directing the parties to proceed with the

arbitration in accordance with the terms thereof.

9 U.S.C. §10:

(a) In any of the following cases the United States

court in and for the district wherein the award was made

may make an order vacating the award upon the

application of any party to the arbitration—

(1) where the award was procured by corruption,

fraud, or undue means.

(2) where there was evident partiality or corruption

in the arbitrators, or either of them.

(3) where the arbitrators were guilty of misconduct

in refusing to postpone the hearing, upon sufficient

cause shown, or in refusing to hear evidence pertinent

and material to the controversy; or of any other

misbehavior by which the rights of any party have

been prejudiced.

(4) where the arbitrators exceeded their powers, or

so imperfectly executed them that a mutual, final, and

definite award upon the subject matter submitted was

not made.

(5S) If an award is vacated and the time within

which the agreement required the award to be made

has not expired, the court may, in its discretion, direct

a rehearing by the arbitrators.

(b) The United States district court for the dis-

trict wherein an award was made that was issued

pursuant to section 580 of title 5 may make an order

vacating the award upon the application of a person,

other than a party to the arbitration, who is adversely

affected or aggrieved by the award, if the use of

arbitration or the award is clearly inconsistent with the

factors set forth in section 572 of title 5.

9 U.S.C. §11:

In either of the following cases the United States court

in and for the district wherein the award was made may

make an order modifying or correcting the award upon

the application of any party to the arbitration—

(a) Where there was an evident material mis-

calculation of figures or an evident material mistake in

the description of any person, thing, or property

referred to in the award.

(b) Where the arbitrators have awarded upon a

matter not submitted to them, unless it is a matter not

affecting the merits of the decision upon the matter —

submitted.

not affecting the merits of the controversy.

The order may modify and correct the award, so as to

effect the intent thereof and promote justice between the

parties.

18 U.S.C. §1964(c):

Any person injured in his business or property

by reason of a violation of section 1962 of this chapter

may sue therefor in any appropriate United States dis-

trict court and shall recover threefold the damages he

sustains ....

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.