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TABLE OF CONTENTS
Page
TABLE OF AUTHORITIES ...................................................... ii
I. INTRODUCTION ......................................................... !
II. PETITION .. : ................................................................ 2
III. VERIFICATION .......................................................... lO
IV. MEMORANDUM OF POINTS AND AUTHORITIES .......... 11
A. Writ Review is Appropriate and Warranted ................... 11
B. Standard ofReview ................................................ 13
C. The Instant Controversy is Beyond the Scope of the
Arbitration Disclosure ............................................. 13
l. Health & Safety Code §L363.1(c) ........................ 14
2. The Instant Case is Not for "Malpractice" ............. 15
3. The Arbitration Disclosure Cannot Bind Plaintiff
to Arbitration for the Underlying Lawsuit ............. 15
D. The Arbitration Disclosure is Unenforceable as a
Matter of Law ....................................................... 16
1. Health & Safety Code §1363.1(b) ........................ 17
2. The Instant Arbitration Disclosure was Not
"Prominently Displayed" ................................. 19
3. Defendants' Arguments ................................... 21
E. The Medicare Act Does Not Preempt Health & Safety
Code §1363.1 ....................................................... 23
F. The Circumstances justify the Delay in Filing the
Instant Petition ...................................................... 27
V. CONCLUSION ............................................................ 29
CERTIFICATE OF COMPLIANCE ........................................... 32
TABLE OF AUTHORITIES
CASES
Amtendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal. 4th 83 ................................................... 28, 29
Atlas Inc. v. Superior Court (1977) 72 Cal.App.3d 63 ................................................ 1, 11
Bertero v. Superior Court (1963) 216 Cal.App.2d 213 ................................................ 11
Burks v. Kaiser Foundation Health Plan, Inc. (2008) 160 Cal.App.4th 1021, 1024 ................... 17, 18, 19, 21, 23
Clay v. Medical Group, Inc. (N.D. Cal. 2007) 540 F.Supp.2d 1101. ............................. 25, 26
Drissi v. Kaiser Foundation Hospitals, Inc. (N.D. Cal. 2008) 543 F.Supp.2d 1076 ................................... 25
Dziffens v. Valenti (2008) 161 Cal.App.4th 434 .......................................... 28, 29
Erickson v. Aetna Health Plans of CalifOrnia, Inc. (1999) 71 Cal.App.4th 646 ................................................ 25
Green v. Mt. Diablo Hosp. Dist. (1989) 207 Cal.App.3d 63 ............................................. 28, 29
Imbler v. PacifiCare of CalifOrnia, Inc. (2002) 103 Cal.App.4th 567 ..................................... 18, 19,25
Independent Assn. of Mailbox Center Owners, Inc. v. Superior Court (2005) 133 Cal.App.4th 396 .............................................. 13
International Film Investors v. Arbitration Tribunal of Directors Guild (1984) 152 Cal.App.3d 699 ................................................ 27
Lewis & Q_ueen v. N.M Ball Sons (195 7) 48 Cal.2d 141 ....................................................... 29
ii
Malek v. Blue Cross qf California (2004) 121 Cal.App.4th 44 ......................... 19, 20, 25, 26, 28, 29
Medeiros v. Superior Court . (2007) 146 Cal.App.4th 1008 ............................................. 18
Pagarigan v. Supe1ior Court (2002) 102 Cal.App.4th 1121. ................................ 1, 23, 24, 26
Ramirez v. Superior Court (1980) 103 Cal.App.3d 746 ................................................. 1
Robertson v. Health Net qf Inc. (2005) 132 Cal.App.4th 1419 .................................... 13, 19, 20
Rodriguez v. Blue Cross qf California (2008) 162 Cal.App.4th330 .................................. 1, 14, 15,16
Saxena v. Gqffiuy (2008) 159 Cal.App.4th 316 .............................................. 15
Smith v. Paci.ficare Behavioral Health qf Inc. (2001) 93 Cal.App.4th 139 ................................................ 25
St. Agnes Medical Center v. Paci.fiCare qf California (2003) 31 Cal.4th 1187 .................................................... 11
Thor v. Superior Court (1993) 5 Cal.4th 725 ....................................................... 15
Western Camps, Inc. v. Rivenvay Ranch Enterp1ises (1977) 70 Cal.App.3d 714 ................................................. 29
.?pnbsch v. Supe1ior Court (2006) 146 Cal.App.4th 153 ......................... 1, 11, 13, 19, 20, 27
.?plezzi v. Paci.ficare qf California (2003) 1 OS Cal.App.4th 5 73 ..................................... 23, 24, 26
iii
STATUTES
Page
42 U.S.C. § 1395 .................................................................... 24
42 U.S.C. §1395w-26(b)(3) ......................................................... 23
Cal. Health & Safety Code §1363.1. ................................ 23, 24, 26, 30
Cal. Health & Safety Code §1363.1(b) ..................... 17, 18, 20, 22, 23, 30
Cal. Health & Safety Code §1363.1(c) ....................................... 14, 16
Cal. Health & Safety Code §1363.1(d) ........................................... 22
Cal. Prob. Code §4202(b) ............................................................ 4
OTHER
Page
69 Fed.Reg. 46914 ............................................................. 24, 26
70 Fed .. Reg. 4588 ................................................................... 24
70 Fed.Reg. 4665 ................................................................... 24
iv
I. INTRODUCTION
This petition seeks a writ of mandate (or other relief) directing
the trial court to vacate its order compelling Plaintiff to arbitrate the
underlying elder abuse and wrongful death lawsuit. It raises two questions:
1. Where a lawsuit against a hospital and its staff is for
"physical elder abuse" and "wrongful death," based on
the intentional tort of "battery," does this constitute a
"dispute" for something different than "malpractice"?
2. Where a notice of "binding arbitration" in a health
care enrollment form lacks any heading or title and is
instead placed in the third and fourth sentences of the
15th paragraph of legalese on the "back side" of the
enrollment form, camouflaged in the same type and
style font as the rest of the paragraph, does the
arbitration disclosure fail to comply with California
Health & Safety Code §1363.l(b)'s mandatory
requirement that it be "prominently displayed"?
The answer is "yes" to both. But for either reason, Plaintiff has
been compelled to arbitration for which there is no jurisdiction. (Rod1iguez v.
Blue Cross qf California (2008) 162 Cal.App.4th 330, 340.) Writs of mandate
are granted to rescue parties from this situation. (:(embsch v. Superior Court
(2006) 146 Cal.App.4th 153, 160-161; Pagarigan v. Superior Court (2002) 102
Cal.App.4th 1121, 1124; Ramirez v. Superior Court (1980) 103 Cal.App.3d
746, 757-758; Atlas Inc. v. Superior Coutt (1977) 72 Cal.App.3d 63,
72-73.) This is what Plaintiff is seeking instantly.
1
II.
PETITION Petitioner/Plaintiff Hector Noval petitions for a writ of
mandate, prohibition or other appropriate writ directing respondent
Riverside Superior Court to (1) vacate its May 9, 2012 order compelling
arbitration and (2) enter a new and different order denying Defendants'
petition to compel arbitration. Petitioner alleges:
Description ofthe Parties
1. Petitioner is the plaintiff in the action entitled Hector
Noval v. Kaiser Foundation Health Plan, Inc., et al., pending in the Respondent
Riverside Superior Court as Case No. RIC 1201608. (Ex. 1, p. 1.) His
prima facie case is set forth at Ex. 14, pp. 445-4 7 0.
2. Respondent Riverside County Superior Court ("the
trial court") is a duly authorized court of general jurisdiction where the
underlying dispute is currently pending, and which issued the order from
which relief is sought by this petition. (Ex. 9, pp. 313-314.)
3. Real Parties in Interest are the "Defendants" in the
case below: Kaiser Foundation Health Plan, Inc., Kaiser Foundation
Hospitals, Southern California Permanente Medical Group, Richard Mark
Bradburne, Anthony Tapia, Dan Wilson, and Nicole Baril. (Ex. 1, p. 1.)
Underlying Lawsuit fOr "Intentional Tort" of ''BatteJ;y"
4. On April 28, 2010, Victorino Noval was admitted to
Defendants' intensive care unit and treated for a lung infection causing
"shortness of breadth." (Ex. 14, p. 451:20-21.) He was placed on a
2
mechanical ventilator for oxygen support and was sedated for comfort. (Ex.
14, p. 451:22-23.)
5. By May 6, 2010, he had experienced "material"
improvement, and by May 7, 2010, he had experienced "further"
improvement. (Ex. 14, p. 452:12-13.) His lung had cleared, his body
temperature was within normal ranges, and according to Defendants, what
he had left to do was regain the strength in his lungs that had atrophied
while he was on the assisted breathing machine. (Ex. 1, p. 11: 1-1 0; Ex. 14,
p. 452: 16-18.)
6. Victorino Noval's two daughters spoke with
Defendants and convinced them to cease treatment and end their father's
life. (Ex. 1, p. 11:1-10; Ex. 14, p. 458:1-3.)
7. Victorino Noval's son, Hector Noval (Plaintiff), was not
m favor of ceasing treatment and had urged Defendants to provide all
possible treatment to his father. (Ex. 14, pp. 455-458.)
8. Ignoring Plaintiffs desires, and at the daughters'
request, Defendants ceased Victorino Noval's treatment and injected him
with morphine to suppress his respiratory functioning and deliberately
trigger his death. (Ex. 1, p. 12: 14-24; Ex. 14, p. 458:4-5.) He died hours
later. (Ex. 1, p. 12:14-24; Ex. 14, p. 458:9.)
9. Defendants admit that they could have kept Victorino
Nova! alive and continued treatment had they desired to do so. (Ex. 1, p.
12:1-12.)
3
10. Victorino Noval was worth $60 million. When he died,
his daughters (as well as his two sons and ex-wife) became instantly
wealthier. (Ex. 1, p. 4:7-16.)
11. What Defendants did constituted the "intentional tort"
of"battery." (Ex. 14, p. 462:2-12.)
12. They had in their possession a copy of Victorino
Noval's Durable Power of Attorney for Health Care, dated July 7, 1999
("DPOA"). (Ex. 14, p. 453: 1-2.) The DPOA named Victorino Noval's son,
Hector (Plaintiff), and one of Victorino Noval's two daughters as his
"attorneys-in-fact" and ')oint agents" to work ')ointly" and "together" to
make the health care decisions. (Ex. 14, p. 453:3-5.)
13. The law states that there can be no change in a
patient's treatment plan without the "unanimous" consent of the joint
agents. (Probate Code §4202(b).) By law, Defendants needed the
"unanimous" consent of both Plaintiff and his sister before they were legally
authorized to do what they did. Without "unanimous" consent, Defendants
were legally required to continue forward with the then-current treatment
plan.
14. Instead of continuing treatment as Plaintiff desired,
Defendants discreetly prepared two kinds of medical notes and placed them
in the file. Some said,jalsely andfiaudulently, that Plaintiffhad agreed with his
sisters to cease treatment. Others said, falsely and fraudulently, that Plaintiff
was not acting in his father's best interests by desiring continued treatment
and that Defendants were not going to follow PlaintifPs wishes for that
reason. (Ex. 14, pp. 456:3-457:13.)
4
Filing Suit & the Order Compelling Arbitration
15. Once Plaintiff discovered what had happened to his
father, as an heir and interested person in his father's estate, he filed the
instant civil lawsuit in Riverside Superior Court against Defendants for
"physical elder abuse" and "wrongful death," among other things, based on
the underlying intentional tort of "battery." (Ex. 1, p. 1.)
16. Defendants filed a Petition to Compel Arbitration,
claiming that Victorino Noval had agreed to "binding arbitration" when he
agreed to his health care service plan with Defendants in 1996. (Ex. 2, pp.
28-238.)
17. The trial court granted the petition on May 9, 2012.
(Ex. 9, pp. 313-314.)
Initial Expectations o[Arbitration
18. Defendants' "Kaiser Arbitration" rules dictate that
arbitration shall be completed and a decision/ award rendered within 18
months (except where the case is "complex"). (OIA Rule 24(a).)
19. Originally, Defendants asserted that arbitration would
only require three days, and the arbitrator set arbitration for March 25,
2014. With those expectations, arbitration would have already been over by
now, and Plaintiff would have already had the "right" to appeal the orders
made in the trial court.
Changed Circumstances
20. Plaintiff has sought Defendants' depositions since the
early stages of this case. To date, Defendants have yet to sit for them.
5
21. No third parties have appeared for their subpoenaed
depositions. Certain of them, including Plaintiffs own sisters, refuse to
honor subpoenas issued in arbitration, claiming that the arbitration lacks
')urisdiction" over them. Without the authority of the state court, Plaintiffs
discovery and trial preparation is exceedingly more difficult.
22. Only Plaintiff has been deposed. He appeared for his
deposition promptly and without any objection whatsoever.
23. On February 10, 2014, the arbitrator sua sponte vacated
the arbitration date that had been set for March 25, 2014.
24. Within days thereafter, Defendants began claiming
they are now intending to call as many as 30 witnesses during their portion
of the arbitration and that they are now insisting that the arbitration
hearing expand to at least 12-15 days.
25. Plaintiff has retained a medical expert who charges
$6,000 per day for his testimony. This is within the standard rate for
medical experts in Southern California. Defendants have retained three
medical experts.
26. Recently, the arbitrator tentatively set the arbitration
hearing for October 6, 2014 through October 21, 2014.
27. When he set the matter for trial, the arbitrator stated
that there would be no court reporter present, and no recordings would be
made of the testimony elicited in arbitration from any of the 30+ witnesses.
6
28. Plaintiff cannot afford to engage m multiple,
duplicative trials (once in arbitration, and then in civil court). Each
duplicative expense that Plaintiff is forced to incur in arbitration makes it
more difficult for him to ultimately to bring this case to a final judgment in
civil court.
29. Also, duplicative trials will consume significant resources
just in trying to coordinate the schedules of 30+ witnesses and subpoenaing
(and seeking orders compelling) their appearances in a 'jurisdiction" they
are refusing to acknowledge.
30. Furthermore, as time passes, it is only natural that
parties become less available and their memories risk fading. For these
reasons, as time passes, the truth gets more difficult to illustrate and the case
gets more difficult to prosecute.
31. For these reasons, should Plaintiff be forced to engage
m a 12-15 day arbitration (with a multi-year lead-up to it) bifore filing an
appeal and bifore presenting this case to a jury in a civil case, he would be
irreparably harmed, and substantial justice would be denied.
Plainti{fs Immediate Actions to Prevent Injustice
32. When the arbitrator vacated the original arbitration
date of March 25, 2014, and when Defendants began claiming arbitration
would expand to 30+ witnesses over 12-15 days, Plaintiff recognized the
changed circumstances and promptly filed a motion in the trial court to
"renew" the trial court's original order compelling the parties to arbitration.
(Ex. 10, pp. 315-358.)
7
33. Plaintiffs "renewal" motion asked the trial court, in
light of the changed circumstances, to consider that Defendants' enrollment
form failed to comply with Health & Safety Code § 1363.1. (Ex. 10, pp. 315-
358.)
34. On March 19, 2014, the trial court heard Plaintiffs
"renewal" motion and denied it. (Ex. 16, pp. 478-479.)
35. Plaintiff has now, immediately thereafter, and without
delay, filed the instant petition. He has no other plain, speedy or adequate
remedy at law but for this petition. (Civ. Proc. Code §1068(a).)
36. Writ relief is appropriate because under the controlling
law, Plaintiffs right to relief is clear and he will be irreparably harmed
without the relief requested.
3 7. The instant petition has followed promptly and
without delay after the changed circumstances in arbitration and after the
trial court denied Plaintiff's motion to "renew" its original order compelling
arbitration.
Prayer for Relief
Based on the foregoing, Plaintiff prays that:
1. This Court issue a peremptory writ of mandate,
prohibition or other appropriate writ in the first instance, directing
Respondent Riverside County Superior Court to (1) vacate its May 9, 2012
order granting Defendants' petition to compel arbitration and (2) deny
Defendant's petition to compel arbitration; or in the alternative,
8
IV.
MEMORANDUM OF POINTS AND AUTHORITIES
A. Writ Review is Appropriate and Warranted.
Writ review is warranted where, as here, a controversy is
compelled to arbitration for which there is no jurisdiction. (.?,ernbschJ supra)
146 Cal.App.4th at 160-161.) Courts find writ review appropriate because
"the expense to the parties in participating in [arbitration] and [then]
seeking review of the arbitration is apparent." (,Zembsch, supra, 146
Cal.App.4th at 161, citing Atlas PlasteJing, supra, 72 Cal.App.3d at 68.)
Parties improperly ordered to arbitrate are "put to the unnecessary delay
and expense of an arbitration, further court proceedings, and an appeal,
after which they would be required to start over." (Bertero v. Superior Court
(1963) 216 Cal.App.2d 213, 222, disapproved on other grounds in St. Agnes
Medical Center v. PacijiCare rifCalifomia (2003) 31 Cal. 4th 1187, 1192.)
Plaintiff is being forced to endure these precise harms:
unnecessary, multi-year delays and duplicative fees, costs, and other
expenses before ever having the opportunity to prosecute the underlying
controversy to a jury. These harms and expenses are "apparent," and he
cannot afford to incur them. His ability to ultimately present this case to a
jury will be irreparably harmed should the Court not issue a writ of
mandate or other relief.
Beyond these "apparent" harms and expenses are other
umque prejudices Plaintiff is facing. The arbitration is forbidding court
reporters and/ or any other means of preserving the testimony of the
witnesses. This means that there will be no record of Plaintiffs cross-
examination of Defendants and their witnesses in arbitration. It will be lost.
In essence, the arbitration will turn into nothing more than a dress rehearsal
11
for Defendants. This will allow them the opportunity to evaluate how they
answered PlaintifPs cross-examination questions the first time in arbitration
and rehearse new I different answers before being re-examined a second time
before a jury in a civil case.
The underlying civil case is a highly "factual" one, and the
credibility of the witnesses is paramount. Forcing Plaintiff to engage in a
dress rehearsal (in arbitration) before being able to present his case to a jury
would eliminate most, if not all, of the sincere, natural, and authentic
aspects of being able to cross-examine the opposing party and their
witnesses for the first time in the presence of the jury. (The sporting
equivalent would be like having to disclose to the other side the very plays
you plan on running; the other side would be at a tremendous, insincere
advantage.)
Additionally, this is an emotionally charged case that has
divided a family. If the allegations are true, PlaintifPs sisters encouraged, if
not assisted, Defendants in ending their healthy father's life so that they could
collect their multi-million dollar inheritances. PlaintifPs sisters are amongst
the most material witnesses to the case. Yet they are refusing to honor
subpoenas. In theory, the arbitrator may be able to "order" their
appearances, but they have no reason to comply with any such order - in
the same way they refuse to comply with subpoenas. It is not as if the
arbitrator (who is a private attorney, sole practitioner) has the legal
authority to issue bench warrants or hold quasi-criminal contempt hearings
in the context of a "Kaiser Arbitration."
Without the of a civil court, and the "authority"
of a civil judge, Plaintiff will not be able to bring the full scope of evidence
12
to the fact-finder's (arbitrator's) attention. He will be denied a fair trial due
solely to the informal 'jurisdiction" and 'judge" imposed upon him.
For all of these reasons, Plaintiff will be irreparably harmed
by being compelled to arbitration and requires a writ of mandate (or other
relief) to prevent it.
B. Standard of Review.
In a mandate proceeding, this Court reviews de novo a trial
court's order compelling arbitration. (:?pnbsch, supra, 146 Cal.App.4th at
162, citing Independent Assn. qf Mailbox Center Owners, Inc. v. Superior Court
(2005) 133 Cal.App.4th 396, 405.) In addition, both questions for this Court
to answer, dealing with the scope and unenforceability of Defendants'
arbitration disclosure, are reviewed de novo. (Zembsch, supra, 146 Cal.App.4th
at 162, citing Robertson v. Health Net of California, Inc. (2005) 132 Cal.App.4th
1419, 1425.)
C. The Instant Controversy is Beyond the Scope of the
Arbitration Disclosure.
scope:
The instant arbitration disclosure provides for the following
" ... .1 understand that ... any claim that I, my heirs, or other claimants associated with me, assert for medical or hospital malpractice or premises liability must be decided by binding arbitration ... "
The disclosure is clear. It provides for arbitration of only
"medical or hospital malpractice ... " It could have provided arbitration for
13
"other disputes," like intentional torts, fraud, and/ or statutory violations,
among other things. But it did not.
1. Health & Safety Code §1363.l(c).
Health & Safety Code §1363.l(c) provides:
"Any health care service plan that includes terms that require binding arbitration to settle disputes and that restrict, or provide for a waiver of, the right to a jury trial shall include, in clear and understandable language, a disclosure that meets all of the following conditions: ...
(c) The disclosure shall clearly state whether the subscriber or enrollee is waiving his or her right to a jury trial for medical malpractice, other disputes relating to the delivery of service under the plan, or both, and shall be substantially expressed in the wording provided in subdivision (a) of Section 1295 of the Code of Civil Procedure."
Where an arbitration disclosure in a health care enrollment
form limits arbitration to "medical [and/or hospital] malpractice," and not
to "other disputes relating to the delivery of service under the plan, or
both," pursuant to Health & Safety Code §1363.l(c), "it [is] impossible to
conclude" that the enrollee "knowingly waived his right to a jury trial"
"with respect to disputes other than medical malpractice." (Rodriguez v. Blue
Cross qf CalifomiaJ supraJ 162 Cal.App.4th at 340.) For that reason, such
disclosures cannot succeed in compelling a party to arbitration for non
"malpractice" causes of action. (Ibid.)
14
2. The Instant Case is Not for "Malpractice".
Plaintiffs case is born in "battery," an intentional tort. It is
not based on "medical or hospital malpractice." His case, as it has
developed, is set forth in detail in his "Opposition" to Defendants' Motion
for Summary Judgment in arbitration. (Ex. 14, pp. 445-470.) This
Opposition, using supporting facts and evidence, sets forth what Plaintiffs
claims will be at trial.
Plaintiffs case consists of two causes of action, "physical elder
abuse" and "wrongful death." The foundation for both is "battery," i.e.,
Defendants' cessation of Victorino Naval's treatment without legal
"consent." This is not a form of negligence, nor is it a form of medical
"malpractice." (Thor v. Superior Court (1993) 5 Cal.4th 725, 735 ["The
common law has long recognized this principle: A physician who performs
any medical procedure without the patient's consent commits a battery
irrespective of the skill or care used"]; see also Saxena v. Griffory (2008) 159
Cal.App.4th 316, 324-325 [Lack of consent in the medical context
constitutes the intentional tort of "battery" and does not fall within the
scope of medical malpractice for purposes of MICRA].)
3. The Arbitration Disclosure Cannot Bind Plaintiff to
Arbitration for the Underlying Lawsuit.
In Rodriguez, supra, 162 Cal.App.4th 330, the arbitration
disclosure contained a similar deficiency, limiting arbitration only to
disputes involving "medical malpractice." (!d. at 340.) The Rodriguez court
explained that this "renders it impossible to conclude" that the enrollee
"knowingly waived his right to a jury trial" "with respect to disputes other
than medical malpractice." (Ibid.)
15
For the same reason, the instant arbitration disclosure
"renders it impossible to conclude" Victorino N oval "knowingly waived his
[heir's] right to a jury trial" with respect to elder abuse and wrongful death
based on the intentional tort theory of "battery." For this reason, and
pursuant to Health & Safety Code §1363.1(c), the arbitration disclosure in
the enrollment form cannot be held to compel Plaintiff to arbitration for
these causes of action. (Rodriguez, supra, 162 Cal.App.4th at 340). Imposing
arbitration on these claims violates §1363.1(c) and its supporting case law.
D. The Arbitration Disclosure is Unenforceable as a Matter
of Law.
The paragraph m Defendants' enrollment form containing
the instant arbitration disclosure is set forth as follows:
• I hereby apply for Kaiser Permanente Senior Advantage membership. I agree to abide by the provisions of the Service Agreement and Health Plan Policies. I understand that, except for small claims court cases, any claim that I, my heirs, or other claim-ants assfWiatedwith me, assert for medical or hospital malpractice or preulises liability must be decided by binding arbitration under California law and not by a lawsuit or resort to court process except as California law provides for judicial review of arbitration proceedings. I/ we are therefore giving up our right to a jury trial and are accepting the use o£binding arbitration.
(Original emphasis; original spacmg; original lines of text; original
formatting.) (Ex. 2, p. 234.)
For context, this paragraph is found on the "back side" of
Defendants' single-page enrollment form. (Ex. 2, pp. 233-234.) The "front
side" demands most of the enrollee's attention with as many as 30 questions
to answer, boxes to check, and/ or items to fill-in. The "back side" contains
15 paragraphs in two columns of dense, small-font legalese and a line at the
bottom for the enrollee to sign. The "front side" reminds the enrollee to
"see and sign back side," and that is likely all any enrollee is given the
16
! 17!
opportunity to do – “see” the dense legalese on the “back side” and quickly
“sign” the form without reading it or discussing any of it with Defendants.
The “back side” of the form contains approximately 644
words. The arbitration disclosure is buried in the third and fourth sentences
of the 15th and final paragraph, immediately following two superfluous
sentences in the same paragraph declaring generally that the enrollee is
applying for “membership” in Defendants’ health care plan and that the
enrollee agrees to abide by the provisions of a separate and distinct “Service
Agreement and Health Plan.” This paragraph is 104 words long, and the
enrollee has to read 58 words into it before finally coming to the words
“binding arbitration” in the third sentence, on the fifth line.
1. Health & Safety Code §1363.1(b).
Any arbitration disclosure in a health care enrollment form
must be “prominently displayed.” (Health & Safety Code §1363.1(b).)
Where it is not, the arbitration disclosure is unenforceable, and there is no
jurisdiction for any arbitration the health care provider seeks to compel.
(Burks v. Kaiser Foundation Health Plan, Inc. (2008) 160 Cal.App.4th 1021,
1024, 1029.)
Health & Safety Code §1363.1 provides:
“Any health care service plan that includes terms that require binding arbitration to settle disputes and that restrict, or provide for a waiver of, the right to a jury trial shall include, in clear and understandable language, a disclosure that meets all of the following conditions: [¶] ... [¶]
(b) The disclosure ... shall be prominently displayed on the enrollment form signed by each subscriber or enrollee.
According to the cases that have evaluated the meaning of
Health & Safety Code §1363.1(b), '"[p]rominent' is defined as 'standing out
or projecting beyond a surface or line,' or 'readily noticeable."' (Imbler v.
PacifiCare rifCaliflmia, Inc. (2002) 103 Cal.App.4th 567, 579.) " ... [T]he word
'prominent' - like its synonyms 'noticeable,' 'remarkable,' 'outstanding,'
'conspicuous,' 'salient,' and 'striking' - means 'attracting notice or
attention.' [Citation.] ['IJ] More specifically, 'prominent' 'applies to
something commanding notice by standing out from its surroundings or
background.' [Citation.]" (Burks, supra, 160 Cal.App.4th at 1026.)
"By requiring that the notice [i.e., arbitration disclosure] be
'prominently displayed,' without dictating exactly how, the Legislature gave
health plans ... the right to choose what typeface, format, headings, and/ or
other devices they would use to make the notice [i.e., arbitration disclosure]
stand out from its surroundings." (Burks, supra, 160 Cal.App.4th at 1 028.)
However, "[c]ourts have 'concluded that strict compliance with section
1363.1 is required to enforce [an] arbitration provision' in a health service
plan. '[T] echnical violations' of the statute ... 'render [the] arbitration
provision unenforceable' regardless of whether the person enrolling in the
health plan received some notice of the arbitration clause by reviewing the
noncomplying provision." (!d., citing Medeiros v. Superior Court (2007) 146
Cal.App.4th 1008, 1015, fns. omitted.)
The legislature's intent is to ensure health care insurers
"prominently display" any arbitration disclosures so that enrollees do not
"unknowingly waiv[ e] their right to a jury trial in a dispute with their health
18
care service plan." (Malek v. Blue Cross qf California (2004) 121 Cal.App.4th
44, 71).
The cases have found that arbitration disclosures are not
"prominently displayed" where a1?:Y of the following exist:
(1) The arbitration disclosure lacks a title or heading
(BurksJ supraJ 160 Cal.App.4th at 1 029; lmblerJ supraJ 103
Cal.App.4th at 5 79);
(2) The arbitration disclosure is not uniquely separated
and/ or indented from the other non-arbitration text
(-?pnbsch, supraJ 146 Cal.App.4th at 165);
(3) The arbitration disclosure is placed within paragraphs
that follow superfluous and/ or non-arbitration text
(Imbler, supra, 103 Cal.App.4th at 579; Malek, supra, 121
Cal.App.4th at 61); or
( 4) The arbitration disclosure does not use significantly
larger font than the font used for other terms in the
enrollment form. (Malek, supra, 121 Cal.App.4th at 61;
Robertson, supra, 132 Cal.App.4th at 1429.)
2. The Instant Arbitration Disclosure was Not
"Prominendy Displayed".
Defendants' arbitration disclosure is "guilty" of all four of the
"failures" from the case law. Among other things, it lacked any heading or
title. It was not uniquely spaced or indented in any way from the other
19
provisions in the form. It was not of any larger font than used elsewhere in
the form. Instead, it was buried in the third and fourth sentences of the 15th
and final paragraph on the "back side" of the form, camouflaged amongst
the rest of the dense, small-font legalese the enrollee had to quickly "see"
before signing.
Even the arbitration disclosures the Court of Appeal has
found to lack "prominence" do a better job than the instant arbitration
disclosure in "standing out" and being "readily noticeable." For example, at
least in Malek, the arbitration disclosure contained the heading
"ARBITRATION AGREEMENT," original emphasis. (Malek, supra, 121
Cal.App.4th at 51.) Similarly, in Robertson, the enrollment form used the
heading "Arbitration Agreem.ent," original emphasis. (Robertson, supra,
132 Cal.App.4th at 1423.) And even the enrollment form in Zembsch had the
heading "Arbitration Agreement: ... " (Zembsch, supra, 146 Cal.App.4th at
158.)
Yet, even these three cases failed to prominently display the
arbitration disclosure because, as the Court of Appeal discussed, there must
be more than a heading to constitute prominence in compliance with Health
& Safety Code §1363.1(b). (Malek, supra, 121 Cal.App.4th at 51; Robertson,
supra, 132 Cal.App.4th at 1429; Zembsch, supra, 146 Cal.App.4th at 164-165.)
There must also be larger font or something else that makes the disclosure
"stand[ ] out" and "project [ ] beyond a surface or line" to render it
"readily noticeable." (Malek, 121 Cal.App. 4th at 51; Robertson, supra,
132 Cal.App.4th at 1429; Zembsch, supra, 146 Cal.App.4th at 164-165.)
Defendants are well-aware of this case law and these
"prominence" requirements. The instant Defendants' similar enrollment
20
form came under scrutiny in Burks v. Kaiser Foundation Health PlanJ Inc. (2008)
160 Cal.App.4th 1021, and the trial court and Court of Appeal found that
Defendants' arbitration disclosure was not "prominently displayed."
According to the Court of Appeal, the arbitration disclosure did not "have a
separate heading" and was "printed in the same ... typeface as the typeface
used in the rest of the enrollment form." (Burks) supmJ at 1 024.) The Court
of Appeal thus concluded "there was nothing that made the [arbitration]
disclosure stand out from the remainder of the form, such that it could be
reasonably expected to command the notice of a person filling out the
form." (Ibid.)
The instant arbitration disclosure is less "prominently
displayed" and more camouflaged than Defendants' enrollment form at
issue in Burks. Like Burks, there is no heading and the font is no larger than
the rest of the document. But unlike Burks, the instant arbitration disclosure
does not even get its own paragraph. It is stuck in the third and fourth
sentences of another topic's paragraph. It is buried. Camouflaged. It blends
in. And it is in no way "prominently displayed."
3. Defendants' Arguments.
Based on the case law, Defendants have been left to argue
that the instant arbitration disclosure is "prominently displayed" because:
(1) the paragraph containing the arbitration disclosure was immediately
before the signature line for the enrollee, and (2) the entire paragraph that
contained the arbitration disclosure was in "bold." Both arguments fail.
Defendants' first argument is recycled from Burks, supra, 160
Cal.App.4th at 1028. In Burks, the Court rejected this argument, explaining
that the disclosure's proximately just above the signature is already a
21
separate requirement in Health & Safety Code §1363.l(d). Burks found that
mere compliance with this Section (d) (relating to proximity of the
disclosure) does not satisfY the "prominently displayed" requirement in
Section 1363.l(b). (Ibid.) "[Tlhe legislative history supports the conclusion
that by requiring prominence in addition to placement immediately above
the signature line, the Legislature intended to require something more than
placement to make the notice prominent." (Ibid.)
Defendants' second argument also fails. While it is true that
the arbitration disclosure is technically in some form of a light "bold" font,
so are five of the 15 paragraphs and approximately 35% of all words on the
page (approximately 227 of 644). Plus, the entire paragraph containing the
arbitration disclosure is in this "bold" font. Nothing about the arbitration
disclosure in the third and fourth sentences "stand[s] out" from the
unrelated and superfluous content, also in "bold," in the first and second
sentences. It is all equally "bolded."
When a drafter wants to "prominently display" a particular
issue, he/ she gives it a heading, its own paragraph, and carefully targets
selected words and holds on!J those words. The drafter does not bold the
entire paragraph containing those words, including a significant amount of
unrelated and superfluous content. Such would serve the opposite effect: it
would de-emphasize the specific words in "bold." Because so much of the
page is in "bold," including the entire paragraph containing the disclosure,
the drafter has de-emphasized the disclosure. It is not uniquely presented on
the page, nor does it "stand[] out" beyond other content- even within its
own paragraph.
22
Instantly, Defendants were asking their enrollee, Victorino
Noval, to sign a document that contained a waiver of his constitutional right
to a jury trial. California law requires that the disclosure of this waiver be
"prominently displayed." Here, no conclusion can be made but that the
disclosure is undetectable by an overview of the document. A reader's eyes
are not immediately drawn to it, nor does it "stand(] out" or "project(]
beyond a surface or line" and "command( ] notice." (Burks, supra, 160
Cal.App.4th at 1 026.) Instead, it is camouflaged amongst its surroundings
and is only spotted by delving into the substance of the legalese and reading
three sentences into the final paragraph. This is not what the legislature had
in mind when it created Health & Safety Code § 1363.1 (b) and declared that
arbitration disclosures must be "prominently displayed" in enrollment forms
or else they are unenforceable.
E. The Medicare Act Does Not Preem.pt Health & Safety Code
§1363.1.
In the trial court, Defendants argued that the Medicare Act
preempts Health & Safety Code §1363.1. (Ex. 11, p. 376: 1-12). It does not.
(:(plez6 v. Pacijicare qf California (2003) 105 Cal.App.4th 573, 585-587
(Medicare Act did not preempt Health & Safety Code §1363.1, using
Medicare Act's pre-2003 preemption language]; Pagmigan v. Superior Court,
supra, 102 Cal.App.4th at 1128, 1135-1136, 1150-1151 [Same.]).
However, it IS true that in 2003, the "Medicare Act"
broadened its preemption language to state: "The standards established
under this part shall supersede any State law or regulation (other than State
licensing laws or State laws relating to plan solvency) with respect to
(Medicare Act] plans which are offered by [Medicare Act] organizations
under this part." (42 U.S.C. §1395w-26(b)(3)).
23
No California Court of Appeal has decided whether or not
and Pagangan still apply in light of this changed preemption language
in the "Medicare Act." But there is certainly support for PlaintifPs position
that and Pagarigan still apply.
The "Medicare Act" did not change its introductory
language, entitled "Prohibition against any Federal interference," which
states: "Nothing in this subchapter shall be construed to authorize any
Federal officer or employee to exercise ... any supervision or control over
the administration or operation of any [State health care] institution,
agency, or person." (emphasis added). (42 U.S.C. § 1395).
Also, the "Medicare Act's" federal regulations relating to the
changed preemption language state: "We also have considered how the
changes [to the more expansive "Medicare Act" preemption language]
apply, if at all, to State tort or contract law that could affect [Medicare Act]
organizations. . . . We continue to believe that generally applicable State
tort, contract, or consumer protection law would not be preempted under
[the Medicare Act]." (See 69 Fed.Reg. 46914).
The same series of federal regulations also state: "State health
and safety standards, or generally applicable standards, that do not involve
regulation of an [Medicare Act] plan are not preempted. (See 70 Fed.Reg.
4588, 4665).
Health & Safety Code § 1363.1 is precisely this type of "State"
statute dealing with "contract" law and/ or "consumer protection laws."
Health & Safety Code § 1363.1 is intended "to protect health care
consumers from the consequences of unknowingly waiving their right to a
24
jury trial in a dispute with their health care service plan." (Malek, supra, 121
Cal.App.4th at 71). Therefore, the Medicare Act does not appear to have
preempted Health & Safety Code §1363.1 or any related California
"contract" or "consumer protection law."
Preemption arguments are nothing new for Health & Safety
Code § 1363.1. Years ago, the California Court of Appeal ruled that the
"Federal Arbitration Act" preempted Health & Safety Code §1363.1.
(Erickson v. Aetna Health Plans qf CalifOrnia, Inc. (1999) 71 Cal.App.4th 646,
652). In a subsequent case, however, the Court of Appeal went the other
direction and ruled that the "Federal Arbitration Act" did not preempt
Health & Safety Code § 1363.1. (Smith v. Paci.ficare Behavioral Health qf
CalifOrnia, Inc. (2001) 93 Cal.App.4th 139, 162). Mter Smith, the Court of
Appeal now consistently rules that the "Federal Arbitration Act" does not
preempt Health & Safety Code §1363.1. (See, inter alia, Imbler, supra, 103
Cal.App.4th at 577).
Now it is the Medicare Act's turn for health care service
providers to accuse of preempting Section 1363.1, and the support for it is a
single federal district court case, Clay v. Permanente Medical Group, Inc. (N.D.
Cal. 2007) 540 F.Supp.2d 1101.1 The Clay decision is not binding upon this
Court, and Plaintiff urges this Court to analyze the issue as Plaintiff does,
above, not as set forth in Clay. In Clay, the district court was dealing with
well-heeled defendants and a plaintiff who did not seek any appellate review
of the decision.
20 days after rendering the Clay decision, the same district court judge issued a second decision in a "related" case, ruling identically. (Drissi v. Kaiser Foundation Hospitals, Inc. (N.D. Cal. 2008) 543 F.Supp.2d 1076.)
25
Moreover, substantively, Clay trumpeted the "Federal
Arbitration Act." (ld. at 1105.) It then assumed Health & Safety Code
§1363.1 regulated "marketing materials," not that it was a "contract" or
"consumer protection law." (/d. at 11 09.) On that assumption, CU;ry found
the "Medicare Act" preempted Health & Safety Code § 1363.1 because the
Medicare Act, to some extent, regulates certain "marketing materials."
(Ibid.)
Clay never addressed the "Medicare Act's" proVIsions
prohibiting Federal interference with states, nor did Clay ever address the
Federal Regulations declaring that the "Medicare Act" was not preempting
"State tort, contract, or consumer protection law." (See 69 Fed.Reg.
46914).
Arbitration disclosures are not "marketing materials." They
are binding "contracts" with significant legal ramifications. Also, Health &
Safety Code § 1363.1 is not a regulation on "marketing materials." It is a
"consumer protection law" put in place to ensure enrollees in health plans
do not "unknowingly waiv[ e] their right to a jury trial in a dispute with their
health care service plan." (Malek, supra, 121 Cal.App.4th at 71).
The Medicare Act is silent on arbitration disclosures. They do
not regulate them in any way. And its own federal regulations expressly
state that it does not preempt "State" "contract" or "consumer protection
law." To find otherwise, that the Medicare Act preempts § 1363.1, would be
to deny the California legislature the ability to protect elders with contract
and consumer protection laws in health care matters. For these reasons,
Plaintiff asserts that .?plezzi and Pagarigan are still the applicable law and/ or
that the Medicare Act does not preempt Health & Safety Code § 1363.1.
26
F. The Circumstances Justify the Delay in Filing the Instant
Petition.
The trial court's order compelling arbitration was
interlocutory. 146 Cal.App.4th at 160, citing International
Film Investors v. Arbitration Tribunal qf Directors Guild (1984) 152 Cal.App.3d
699, 703.) Plaintiffs right to appeal will lie on{v when arbitration has
concluded and the trial court confirms any final order I award rendered in
arbitration. (International Film Investors, supia, 152 Cal.App.3d at 703.)
As Defendants originally represented, arbitration would be
completed promptly. Defendants' own rules declared that arbitration would
be completed in less than 18 months, and they, themselves, represented that
the instant arbitration would only be approximately three days long.
Defendants, early in the proceeding, agreed to a March 25, 2014
arbitration date.
Had Defendants stayed true to these representations, any
unwarranted and/ or undue expense and consumption of time before an
"appeal" would have been mitigated by the speed and efficiency of the
arbitration proceeding. In fact, under these original expectations, Plaintiff
would have already completed arbitration and would currently already be
in a position to appeal the trial court's order compelling it.
But the circumstances have changed and there does not
appear to be any end to arbitration in sight. Defendants have not sat for a
single deposition, neither have any third parties or Defendants' alleged 30+
witnesses. The arbitration date has been continued, and Defendants have
taken that opportunity to expand the scope of the case to include 12-15
days of proceedings.
27
Simultaneously, Plaintiff has learned that there will be no
court reporter present at arbitration or any other form of (audio/video)
recording to preserve the testimony presented. This is a highly "factual"
case, and the testimony of the parties and their witnesses is paramount.
Plaintiff will be significantly and irreparably harmed if he must jirst present
his case and cross-examination of Defendants and their witnesses in a non-
binding arbitration forum before being able to do so in front of a jury.
Within days of Plaintiff discovering these circumstances, he
filed in the superior court a motion to "renew" his opposition to
Defendants' petition to compel arbitration. (Ex. 10, pp. 315-358.) The trial
court denied this motion to "renew." (Ex. 16, pp. 4 78-4 79.) Promptly, and
without delay, Plaintiff has now filed the instant petition for a writ of
mandate and/ or other relief. In short, Plaintiff has not delayed in any way
in seeking appellate review of the trial court's order compelling arbitration
once the arbitration date was continued and he discovered the
circumstances above that will render arbitration substantially prejudicial
and irreparably harmful.
The Court of Appeal has stated, in a similar context, that "the
progress of arbitration was not material" to the Court's analysis of whether
or not to issue a writ of mandate. (Malek, supra, 121 Cal.App.4th at 60).
Plaintiff asks the Court to adopt this position instantly. That is
because contracts contrary to express statutes, i.e., the instant arbitration
disclosure, are illegal and void. (Green v. Mt. Diablo Hosp. Dist. (1989) 207
Cal.App.3d 63, 73; Dziffens v. Valenti (2008) 161 Cal.App.4th 434, 454;
Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83,
103-104.) Noncompliance with Health & Safety Code §1363.1 voids an
28
! 29!
arbitration clause as unenforceable. (Malek v. Blue Cross of Calif. (2004) 121
Cal.App.4th 44, 70-72.) The court, at any stage of the proceeding, “has
both the power and duty to ascertain the true facts [and law] in order that it
may not unwittingly lend its assistance to the consumption or
encouragement of what public policy forbids.” (Western Camps, Inc. v.
Riverway Ranch Enterprises (1977) 70 Cal.App.3d 714, 725, citing Lewis &
Queen v. N.M. Ball Sons (1957) 48 Cal.2d 141, 147-148).
Instantly, as discussed in detail above, there is no jurisdiction
for arbitration, and the parties have been ordered to engage in arbitration
pursuant to a purported arbitration disclosure that is invalid, unenforceable,
illegal, and against public policy. (See Green, supra, 207 Cal.App.3d at 73;
Duffens, supra, 161 Cal.App.4th at 454; Armendariz, supra, 24 Cal.4th 83, 103-
104; Malek, supra, 121 Cal.App.4th at 70-72.) Therefore, any “delay” in
filing the instant petition “is not material” in the light of the consequences
Plaintiff is facing without judicial review. (Malek, supra, at 60.) What is
“material” is preserving justice and ensuring the parties are not irreparably
harmed by an excessively long, arduous, and expensive arbitration
procedure with no jurisdiction over the parties to begin with.
V.
CONCLUSION
For the reasons set forth above, there is no jurisdiction for the
arbitration for which the parties are being forced to participate. Defendants’
arbitration disclosure expressly limits the scope of “binding arbitration” to
only “medical or hospital malpractice…” This is not such a case of
“malpractice.” It is a case based on intentional tort theory, which far
exceeds the scope of Defendants’ arbitration disclosure.
Moreover, Defendants' arbitration disclosure was not
"prominently displayed" in its enrollment form as required by Health &
Safety Code § 1363.1 (b). It lacked any heading, unique spacing, or large
font. It was buried in the third and fourth sentence of another topic's
paragraph and camouflaged in the same font as the rest of the paragraph. It
does not "stand(] out" in any way, nor is it "prominently displayed" in any
way.
Both of these conclusions are based on Health & Safety Code
§ 1363.1, which is an often used "contract" and "consumer protection law"
to ensure health care enrollees, including elders, do not unknowingly waive
their constitutional rights to jury trials when contracting for health care.
As a matter of first impression for the Court of Appeal, this
case presents the issue of whether or not the federal "Medicare Act"
preempts this statute and renders it inapplicable when dealing with elders -
one of the state's most protected classes of individuals. The ftderal
regulations make clear that the "Medicare Act" does not do so, but a single
flderal court case has created uncertainty. California state superior courts,
parties, and legal/medical practitioners across the state would all benefit by
the Court of Appeal's voice on this issue - confirming the applicability of
Health & Safety Code § 1363.1 to all health care enrollees, including elders.
Finally, Plaintiff asks the Court to find justification in the
timing of the instant petition. It is true that Plaintiff could have filed some
version of this petition in the year 2012, but at that time, the circumstances
were different, and less arduous. Since the circumstances have changed,
significantly and prejudicially, Plaintiff has wasted no time in seeking relief
30