Pre-Dispute Binding Arbitration Agreements in Medical Malpractice Claims: An Emerging Argument Against Enforceability

Dec 12

I. Introduction

Arbitration is ideally suited for resolving medical malpractice claims. Medical malpractice claims typically necessitate understanding complex medical procedures, medical decision-making, human anatomy and physiology, disease pathology, and standards of care. Further complicating the examination of a medical malpractice allegation is that medicine can be more art than science.[1] As novelist Paul Auster wrote in Sunset Park, “The human body is strange and flawed and unpredictable.” This complexity is not ideal for layperson factfinders who comprise a jury of our peers. The benefits of employing a subject matter expert as an arbitrator and a shorter and less costly dispute resolution process seem to be a perfect match for medical malpractice disputes.

Unfortunately, signs and symptoms evidence the genesis of a problem caused by a strategy often utilized by parties seeking advantage and enforced by courts: pre-dispute binding arbitration clauses. Providers have begun to obligate patients to arbitration as a condition of receiving care—sometimes of their own volition and other times at the behest of a commercial payer or employer. While there has yet to be anything approaching the proliferation of use in the healthcare industry, pre-dispute binding arbitration agreements threaten patients and their rights by improperly shielding medical providers from liability.

Because of the methods used to ensnare patients into waiving their rights, courts should view pre-dispute binding arbitration agreements in some medical malpractice claims as unfair, unreasonable, procedurally unconscionable, and a violation of a provider’s fiduciary duty to patients. In exploring these agreements within the context of medical malpractice, this writing examines which parties employ pre-dispute binding arbitration agreements, why courts should hold them unenforceable, and most importantly, how arbitrators and states should seek to protect vulnerable patients.

II. The Need for Reformation in Healthcare Disputes

Dispute resolution within the U.S. healthcare system has been the subject of reform efforts for decades.[2] Conflict arises in healthcare in many forms, including patient safety and medical negligence claims, product liability claims, and physician employment disputes.[3] The federal government brings enforcement actions against medical providers, drug and device manufacturers, pharmacies, suppliers, business services, and others under regulations such as the False Claims Act and other fraud-related statutes, the Healthcare Insurance Portability and Accountability Act, the Emergency Medical Treatment and Labor Act, and many other laws and rules regulating the healthcare industry.[4] Further, some conflicts appear in contract disputes, including payment and reimbursement disputes between payers, providers, and patients.[5]

The need for alternative dispute resolution processes increased in the 1970s as medical malpractice claims grew.[6] The demand increased as managed care organizations proliferated onto the scene in the “managed-care revolution” during the 1980s.[7] Managed-care requirements began to impose endless frustrations on healthcare practitioners and consumers as they negotiated the healthcare system.[8] For the past forty years, consumers and healthcare providers have endured the influence of managed care organizations in determining appropriate and medically necessary treatments, access to specialists, and payment schedules.

As managed care has grown, payment rules have become more strict and administrative burdens more complex. As technology and the standard of care have advanced, federal healthcare financial programs and managed care organizations have accommodated innovations. However, innovation often attracts bad actors seeking profit. Unfortunately, some of these bad actors are industry stakeholders feeling constrained by the burdens of regulation and declining payment rates. For example, in 2021, the Department of Justice charged more than 138 defendants and 42 licensed medical professionals in claims totaling more than $1.4 billion.[9]

Each of these growth areas increases the likelihood of disputes. Healthcare providers and health plans seek to mitigate the consequences of disputes by opting for alternative forms of dispute resolution, particularly arbitration.[10] As a result, healthcare providers and health plans often employ the highly controversial strategy of including mandatory, pre-dispute arbitration clauses in their agreements.[11] While proponents argue that healthcare disputes are ripe for arbitration and the benefits are indisputable, questions of fairness and equity abound. For example, when unsophisticated and vulnerable parties, such as patients, sometimes encounter mandatory arbitration clauses buried in a mound of registration paperwork requiring a signature as a condition of treatment, they unsuspectingly give up their right to a jury trial. Moreover, in the face of repeated and egregious conduct, those subject to mandatory arbitration may not have access to a class action. Even worse, egregious conduct might not become publicly available because of confidentiality restrictions.

III. Understanding the Federal Arbitration Act

Congress passed the Federal Arbitration Act in 1925, requiring judicial enforcement of arbitration agreements in maritime and commercial transactions.[12] At the time and until 1991, the Act exempted “contracts of employment of semen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”[13] Section 2 of the Federal Arbitration Act provides as follows:

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.[14]

Congress’s enactment of this Section permitted businesses to agree to submit any future commercial dispute to confidential, binding arbitration without subjecting the businesses or their disputes to public forums. Moreover, the regulation ensured that the federal courts would enforce arbitration agreements and awards.[15] However, the regulation includes an ambiguous phrase. Congress failed to define “a contract evidencing a transaction involving commerce.” Therefore, the courts are left to interpret the meaning and intent.

Also ambiguous is whether the Federal Arbitration Act preempts state law. For decades, the law only applied to federal disputes, not substantive state laws involving torts, contract disputes, or property disputes. The Supreme Court did not recognize an express preemption provision within the Federal Arbitration Act and determined that Congress did not intend for applicability to all arbitrations.[16] Instead, the Volt Court held that the Act could only preempt state laws when in conflict with federal law.[17] However, in subsequent cases, the Court examined the language in Section 2 requiring that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.”[18] Thus, while Section 2 does not contain an express preemption clause, it substantively functions as one.[19]

The Supreme Court continued the expansion of the Federal Arbitration Act’s scope when it ruled that corporations could force employees to arbitrate claims under the Age Discrimination in Employment Act.[20] This shift in interpretation ushered in the opportunity to resolve statutory claims using arbitration. Perhaps the most considerable expansion of the Act’s scope came in Allied-Bruce Terminix Companies, Inc. v. Dobson when the Court held that courts should read the interstate commerce language contained in Section 2 broadly enough to “extend the Act’s reach to the limits of Congress’s Commerce Clause power.”[21]

Justice Breyer made several compelling conclusions in his 7-2 opinion for the Court. First, J. Breyer stated that the phrase “involving commerce” is broader than the often-used phrase “in commerce;” therefore, they apply to more than “‘only persons or activities within the flow of interstate commerce.’”[22] J. Breyer then examined the meaning of the word “involving.” The Court concluded that the word “involving” is “broad” and is functionally equivalent to the use of the word “affecting” in the phrase “affecting commerce”—a phrase used by Congress to signal its intent to exercise its Commerce Clause powers fully.[23] J. Breyer pointed to the Court’s holding in Perry v. Thomas, affirming that the Federal Arbitration Act “embodies Congress’s intent to provide for the enforcement of arbitration agreements within the full reach of the Commerce Clause.”[24] Finally, the Court held that its broad interpretation was consistent with the Act’s fundamental purpose of creating “equal footing” with other contractual provisions.[25]

These and subsequent Supreme Court decisions have collectively established that courts must enforce arbitration agreements according to their terms with few exceptions: (1) there is a contrary congressional command overriding the Federal Arbitration Act; (2) the agreement prohibits a party from pursuing a federal statutory claim; or (3) a contract defense derived from state law invalidates the agreement so long as that contract defense does not discriminate against arbitration and does not frustrate the purposes of the Act.[26]

In response to the Supreme Court’s actions, businesses in practically every industry and transaction type began to incorporate pre-dispute binding arbitration agreements. Businesses leveraged the opportunity to shift the balance of power in disputes away from the consumer, as challenging these agreements in court is almost always an unsuccessful strategy. Still, some state courts are unwilling to enforce mandatory arbitration agreements when fairness is questionable. For example, when the perception is such that requiring a party to engage in an arbitration to settle a dispute would be unfair, contradict public policy, or in some form fail to protect the interest of vulnerable persons, some courts have attempted to invalidate the agreements.[27] However, pre-dispute binding arbitration agreements remain the centerpiece of many consumer agreements. Healthcare transactions between providers and patients, including those that result in medical malpractice actions, are no exception.

IV. The Rise of Pre-Dispute Binding Arbitration Agreements

In 1925, Congress passed the Federal Arbitration Act to bring efficiency and expediency to commercial business disputes.[28] Since its enactment, the United States Supreme Court has leveraged the Act as a front-line tool for resolving legal disputes. The Court has repeatedly affirmed its position of deference when enforcing arbitration decisions. As a result, businesses began incorporating pre-dispute binding arbitration clauses in contracts, user agreements, terms of service, and dispute resolution provisions in almost every consumer-driven industry. The Court’s policy of favoring arbitration creates an imbalance of power that can result in prejudicing consumers. This imbalance rises to unconscionable within the context of medical malpractice claims.

A. Defining Pre-Dispute Binding Arbitration

Mandatory binding arbitration is a structured process—although less structured than litigation—in which parties agree to submit a dispute to a third-party neutral arbitrator or tripartite panel of arbitrators.[29] Pre-dispute binding arbitration involves an agreement memorialized between the parties in a contract before a dispute arises. There is no requirement for arbitrators to have any legal education or training; therefore, the process is less formal and more limited than litigation.[30]

The rules of evidence do not apply in an arbitration hearing, and the discovery process is limited.[31] In some cases, arbitration clauses even prohibit depositions. Neither the Federal Arbitration Act nor the American Arbitration Association rules obligate arbitrators to follow the law, and arbitrators do not issue written legal opinions.[32] Therefore, arbitration in no way compels other legal processes to consider new legal precedents for future conduct based on arbitration decisions.[33] Furthermore, arbitration hearings are private affairs, and decisions often remain confidential at the request and agreement of the parties.

Arbitration awards often reflect the design of arbitration not as a replacement for litigation but rather as a means to reach a settlement agreement by use of a neutral decision-maker when circumstances are such that the parties cannot settle a dispute themselves.[34] Therefore, arbitrators often split arbitration awards and the arbitrator’s fees, ranging from a couple of hundred dollars per hour to thousands per hour.[35] Decisions are almost always final and rarely appealable.

Many corporations, including medical practices, hospitals, and nursing homes, include binding arbitration clauses in standard agreements, often buried in pages of terms that customers—and patients—do not read.[36] Signing the unread agreements obligates consumers and patients to the arbitration process if a dispute arises, resulting in the relinquishment of rights to jury trials and class actions. The corporations thus establish control over the arbitrator’s selection, the arbitration’s location, the rules of the arbitration, and who assumes the cost, unbeknownst to unsuspecting consumers and patients.

B. Distinguishing Pre-Dispute Binding Arbitration

Many types of arbitration agreements exist besides those that obligate the consumer to waive their rights before a dispute arises. These include voluntary post-dispute agreements, pre-dispute agreements that are not a pre-condition of a transaction or business relationship, and non-binding agreements. Each offers consumers and patients the opportunity to make an informed decision and leverage to counter the strategic advantage inherent to corporations in binding pre-dispute agreements. In a voluntary post-dispute agreement, the parties agree to the arbitration process after a dispute arises. Conversely, pre-dispute binding arbitration agreements require the parties to forgo their opportunities to pursue a jury trial and class action for all future disputes. Pre-dispute binding arbitration agreements are ordinarily irrevocable.[37]

Historically, parties entered into arbitration agreements to resolve disputes outside the judicial system to avoid a lengthy litigation process and high costs.[38] Moreover, parties sought access to neutral adjudicators with specialized expertise.[39] Arbitration in America predates colonization, as Native Americans used the process to resolve disputes among tribes.[40] As the practice continued as a method to resolve disputes in commercial transactions, American courts had enforcement discretion over arbitration agreements and generally enforced post-dispute agreements to arbitrate.[41] However, many were averse to imposing an obligation for a party to arbitrate based upon a pre-dispute agreement.[42]

Following a series of Supreme Court opinions in the 1970s and 1980s, judicial policy toward arbitration began to shift toward enforcing arbitration agreements as parties wrote them.[43] In the 1953 case Wilko v. Swan, the Court refused to enforce pre-dispute arbitration clauses in securities fraud cases while interpreting the Securities Act of 1933 to prohibit mandatory arbitration.[44] However, the Court first affirmed in 1983 that federal policy favors arbitration in commercial disputes in the case Moses H. Cone Memorial Hospital v. Mercury Construction Corp.[45] The Court subsequently signaled its reversal was complete when it overruled Wilko in Rodriguez de Quijas v. Shearson/Am. Exp., Inc. affirming that “Wilko was incorrectly decided and is inconsistent with the prevailing uniform construction of other federal statutes governing arbitration agreements in the setting of business transactions.”[46] The Court has repeatedly affirmed a judicial policy favoring arbitration since.[47]

The foundation upon which the Court continues to affirm the policy favoring arbitration is the Federal Arbitration Act of 1925. The Act’s purpose was to establish an “equal footing” for arbitration agreements compared to other contracts to overcome the judicial hostility toward arbitration.[48] As the Court increased its reliance on the Federal Arbitration Act in affirming legislative and judicial policy favoring arbitration, it has yet to find anything within the law limiting the scope from including pre-dispute binding arbitration agreements. These pre-dispute agreements exist between businesses and consumers in many industries, including commercial agreements for all types of goods and services, financial agreements including personal accounts, loans, and credit cards, and labor and employment agreements. In the 1970s, during a boom in medical malpractice claims, that pre-dispute arbitration began to appear in healthcare agreements.[49]

V. Pre-Dispute Binding Arbitration in Medical Malpractice Claims

Dramatic growth in medical malpractice litigation during the 1970s led to larger and more frequent awards. Part of that growth may include frivolous lawsuits against medical practitioners, although that assertion is debatable.[50] Insurance companies responded with increased malpractice insurance premiums. Further concerns included the possibility that patients would begin to encounter limitations in accessing specialty healthcare services and that the costs of litigation, settlements, and awards would generally increase healthcare costs to patients while causing a decrease in the quality of care.[51] In the early 2000s, costs of litigation comprised approximately 55% of every malpractice insurance premium.[52] Overall medical liability costs totaled over $55.6 billion, or 2.4% of healthcare spending.[53]

Many in the healthcare industry assume that health plans and providers sought to balance the risk from the consequences of increased disputes by turning to mandatory binding arbitration, a highly controversial practice.[54] However, physicians use arbitration agreements less widely in medical settings than once thought.[55] In a recent study, 91% of medical providers do not require patients to sign arbitration agreements.[56] Interestingly, when asked by they do not ask patients to sign arbitration agreements, physicians indicated that the primary reason is that they are unfamiliar with them.[57] Another common response was the belief that requiring patients to sign arbitration agreements sets “the wrong tone.”[58]

Interestingly, the study also asked those providers who require the agreements why they required patients to sign arbitration agreements. Most indicated that they did so at the direction of their insurer.[59] One-third stated that requiring arbitration agreements was the policy of their provider group, and an additional one-third believed that arbitration was cheaper than medical malpractice litigation.[60] Still, others desired to avoid the courts.[61]

Medical malpractice claims are certainly arbitrable, and judicial enforcement of pre-dispute binding arbitration agreements is indistinguishable from those found in other types of claims.[62] Notably, thirteen states have adopted legislation to protect and enforce the validity of arbitration agreements in medical malpractice claims.[63] However, common provisions within arbitration agreements arguably have detrimental effects on a patient’s ability to seek and obtain justice for injuries resulting from medical malpractice.[64] For example, some agreements prohibit either party from obtaining legal representation—a restriction that may seem to inhibit both parties equally; however, a corporate defendant may benefit from seeking advice from in-house counsel.[65] Others permit the provider to select the arbitrator, a seeming advantage as the provider may choose an arbitrator who appears biased in favor of the provider.[66]

Most arbitration proceedings are final, with no right to appeal decisions.[67] Moreover, legal precedent does not bind arbitrators, and therefore arbitrators have more flexibility in making decisions.[68] Patients may also find arbitration cost-prohibitive when required to fund the process in advance rather than with lawyers working on contingency in traditional litigation.[69] Furthermore, arbitration clauses may prohibit patients from undertaking class action lawsuits, as the U.S. Supreme Court held in a 2003 case that an arbitrator must determine whether contracts permit class actions based on an interpretation of the contract terms.[70]

Generally, the legal and healthcare industries have abhorred the enforcement of pre-dispute binding arbitration agreements in medical malpractice claims.[71] In 1998, the American Medical Association, the American Bar Association, and the American Arbitration Association jointly released a report positing that alternative dispute resolution processes must respect due process and be fundamentally fair. The three associations affirmed that:

The agreement to use ADR should be knowing and voluntary. Consent to use an ADR process should not be a requirement for receiving emergency care or treatment. In disputes involving patients, binding forms of dispute resolution should be used only where the parties agree to do so after a dispute arises.[72]

Recently, however, the Sixth Circuit rejected this policy. On June 25, 2021, the Sixth Circuit held that the American Arbitration Association’s Healthcare Policy Statement and Healthcare Due Process Protocol is not the authority upon which determinations of arbitrability lie.[73] The Sixth Court majority made it clear that by incorporating the American Arbitration Rules in an arbitration agreement, the parties agree that an arbitrator determines gateway questions of arbitrability.[74] The Sixth Circuit’s holding reinforced its 2020 holding in Blanton v. Domino’s Pizza Franchising and aligned with the U.S. Supreme Court’s 2019 ruling in Henry Schein, Inc. v Archer & White Sales, Inc.[75] Therefore, it is the arbitrator’s role to determine whether the parties made a pre-dispute contractual agreement for binding arbitration, and the courts must enforce arbitration according to those contractual terms.[76]

VI. Arguing the Unconscionability of Pre-Dispute Arbitration Clauses in Medical Malpractice Claims

While medical malpractice claims are subject to the same analysis and enforcement as other arbitration agreements under Section 2 of the Federal Arbitration Act, some patient advocates assert that such agreements binding a patient to arbitration before a dispute arises are unconscionable.[77] The unconscionability argument relies on the notion that adhesion contracts are typically the sources of pre-dispute binding arbitration clauses.[78] Generally, courts impose two limitations on adhesion contract enforcement.[79] First, when a contract provision does not fall within reasonable expectations of a weaker or “adhering” party, the courts will not enforce the provision against that party.[80] Second, courts will not enforce a contract provision when it is unduly oppressive or unconscionable, even when the provision is consistent with the parties’ reasonable expectations.[81]

The nonlegal definition of “unconscionable” is “shockingly unfair or unjust,” “excessive, unreasonable,” and “not guided or controlled by conscience.”[82] The legal standard for unconscionability aligns with the dictionary meaning in that it involves an extreme sense of unreasonableness that “shock[s] the conscience.”[83] A contract is unconscionable if the “inequality of the bargain is so manifest as to shock the judgment of a person of common sense, and where the terms are so oppressive that no reasonable person would make them on the one hand, and no honest and fair person would accept them on the other.”[84]

To assert an unconscionability defense requires both procedural and substantive unreasonableness or unfairness.[85] First, a plaintiff must demonstrate unconscionability in the procedures used to form the contract. Second, a plaintiff must show unconscionability of the substantive terms. Procedural unconscionability focuses on oppression or surprise resulting from unequal bargaining power, while substantive unconscionability refers to overly harsh or one-sided results.[86] Thus, an unconscionability inquiry assesses whether the terms were unfair and whether the process of entering into the agreement disadvantages one party.

The premise behind the doctrine of unconscionability is to make transactions fair and equitable between parties, particularly those who cannot protect themselves. The concepts of “freedom of contract” and the lack of any requirement that exchanged consideration be of equal value represent the judiciary’s position of refraining from interrupting private party bargains.[87] However, limits do exist where an exchange's inequity indicates an unreasonable contract formation process.

The concern in medical malpractice claims is the potential unconscionability of patients signing binding arbitration agreements as part of patient intake paperwork while the patient seeks immediate relief from illness or pain. Absent a finding of procedural or substantive unconscionability, courts have repeatedly enforced arbitration agreements provided to patients in consent forms and other patient intake documents.[88] Patients often overlook these arbitration agreements obscured amongst consent forms, demographic inquiries, financial disclosures, policy disclosures, insurance authorizations, privacy disclosures, and other forms.[89] Even in cases with no present emergency, patients have a heightened sense of urgency based on pain and discomfort. Patients may also develop personal attachments to physicians based on trust. Thus, patients can be particularly vulnerable when a physician-patient relationship exists.

A. The Use of Pre-Dispute Binding Arbitration Agreements to Shield Against Medical Malpractice is Procedurally Unconscionable.

Procedural unconscionability applies to the overall formation of a contract and involves unfairness in the process by which parties agree. It manifests by oppression through the gross inequality in bargaining power or unfair surprise[90]. Proving procedural unconscionability can be an immense obstacle for plaintiffs because it requires more than just an imbalance in bargaining power. Instead, there must be gross inequality demonstrated by one party lacking a meaningful choice.[91] An example of such a circumstance is an agreement through an adhesion contract.[92] However, not all adhesion contracts are procedurally unconscionable, particularly when the weaker party can contract with an alternative party. Nevertheless, a lack of voluntariness, a gross disparity in party sophistication or bargaining power, or a lack of opportunity to study and inquire about contract terms can implicate procedural unconscionability.

Some states have already recognized and addressed concerns about a patient’s lack of choice. For example, Colorado’s Health Care Availability Act regulates binding arbitration agreements between healthcare providers and patients.[93] Colorado only permits pre-dispute binding arbitration agreements related to medical disputes when patients agree to them voluntarily.[94] Notably, the law expressly prohibits a medical malpractice insurer from requiring healthcare providers to require patients to execute arbitration agreements as a condition of providing medical malpractice insurance.[95] Furthermore, the law prohibits healthcare providers from requiring patients to sign arbitration agreements as a condition of receiving care.[96]

Unfair surprise is evidence of procedural unconscionability when one of three elements is present. First, if the weaker party lacks knowledge or understanding of the terms of the agreement because of a lack of education or poor cognitive skills, the party may claim procedural unconscionability. Such a lack of understanding need not approach incapacity; however, success often resides on whether the party is uneducated, very young, or very old. Second, procedural unconscionability is available as a defense when the superior party uses misleading or dishonest marketing practices to persuade the weaker party. Lastly, a weaker party may pursue a procedural unconscionability defense when the superior party takes purposeful steps to obscure or convolute key terms through inconspicuous print or the use of complex legalistic language.

The question in medical malpractice cases is whether a patient signing an agreement containing a pre-dispute binding arbitration clause as part of a more extensive assortment of forms and disclosures during the patient intake process triggers the elements of procedural unconscionability. Considerations include the degree to which the process protects a patient’s interests, with the more significant concern being the unilateral drafting of the agreement—essentially a contract of adhesion—and a patient’s lack of informed consent when signing the agreement positioned amidst non-binging notices and demographic inquiries. Whether a contract is adhesionary is relevant for courts in a procedural unconscionability analysis.[97] Furthermore, the use of standard forms and a lack of an opportunity to negotiate are all indications of procedural unconscionability; however, most courts will not consider a contract meeting these elements alone to be procedurally unconscionable.[98] The patient’s state of mind is of further consideration as it relates to one’s manifestation of assent. To successfully claim procedural unconscionability, one must assert multiple procedural deficiencies.

Healthcare providers requiring pre-dispute binding arbitration agreements draft the terms unilaterally—there is no meeting of the minds and no bargained-for consideration. Instead, healthcare providers intend to impose and enforce them in the event of a future injury to a patient. The determination by the provider to limit a patient’s sacrosanct right to seek a trial by a jury of peers for future medical malpractice claims occurs before the provider ever sees the patient. “There is no quid pro quo, no negotiation, and no reduction in levels of care or cost; the only difference is the forum in which the inquiry claims are adjudicated.”[99] In the California case of Wheeler v. St. Joseph Hospital, the Fourth District Court of Appeals determined that an arbitration clause incorporated in the hospital’s “Conditions of Admission” form was only binding if the hospital called the arbitration clause to the patient’s attention and gave the patient a reasonable explanation of its meaning and effects, including an explanation of any options available to the patient.[100]

The lack of any requirements for a healthcare provider to sufficiently inform patients about pre-dispute binding arbitration agreements contrasts dramatically with a provider’s obligation to fully inform a patient to achieve informed consent such that a patient can make a meaningfully informed medical decision.[101] Patients’ rights, including the right to make informed decisions, became controversial in the 1970s as medical technology advanced dramatically, and ethical issues rose to the forefront of the nation’s conscience, such as a patient’s right to die and a patient’s right to access medical treatments.[102]

B. Requiring a Pre-dispute Binding Arbitration Agreement as a Condition to Receive Care is Not Substantively Unconscionable Per Se

Substantive unconscionability involves an examination of the legality and fairness of contract terms rather than the process by which parties agree to the terms.[103] An analysis of substantive unconscionability focuses on whether the contract terms are commercially reasonable and fair, the purpose and effect of the terms, whether the terms unreasonably favor one side over the other, and other public policy concerns. For example, courts have held arbitration agreements requiring arbitration before a panel of physicians to be oppressive or unconscionable.[104]

In the California case, Swain v. LaserAway Med. Grp., Inc., a court held that a pre-dispute binding arbitration agreement was substantively unconscionable.[105] The agreement required the patient to arbitrate all claims she was likely to bring, including allegations that LaserAway’s services were “unnecessary or unauthorized or were improperly, negligently or incompetently rendered.”[106] However, the agreement did not obligate LaserAway to arbitrate all claims it was likely to bring. The court’s resulting determination was that the agreement was one-sided and thus substantively unconscionable.[107]

Generally, arbitration agreements survive a substantive unconscionability analysis absent a limitation creating a one-sided advantage, including medical malpractice claims.[108] While drafting an arbitration agreement and positioning it in a manner intended to avoid drawing attention to the terms may constitute procedural unconscionability, there is nothing substantively unfair about binding arbitration.[109]

VII. Fiduciary Duty: A New Route to Justice

Despite the seemingly insurmountable challenge of making a successful defense claim of unconscionability, advocates of patients who have suffered injuries resulting from medical negligence have continued to seek alternative routes to justice. In 2017, the Supreme Court of North Carolina outlined a path to justice for patients who feel victimized by a healthcare provider’s use of a pre-dispute binding arbitration agreement: a breach of fiduciary duty. The Court shifted the focus from analyzing an unconscionability contract defense to fraud by examining informed consent and its role in the fiduciary duties of physicians to their patients to show constructive fraud as a means to avoid binding arbitration in medical malpractice claims.

A. The Role of Informed Consent

“Informed consent” is a negligence concept predicated on a physician's duty to disclose information necessary for the patient to knowledgeably evaluate the nature of the treatment and any associated substantial risks, the available alternative options, and the risks and likely outcomes of those alternatives before the physician subjects that patient to a course of treatment.[110] The term “informed consent” first appeared in 1957 in Salgo v. Leland Stanford Jr. Univ. Bd. of Trustees.[111] The doctrine of informed consent derives from the strong judicial deference to individual autonomy and the idea that individuals have a right to be free from nonconsensual interference with their person.[112] Justice Cardozo articulated the principle when he wrote, “every human being of adult years and sound mind has a right to determine what shall be done with his own body.”[113]

Notably, the standard of informed consent relates to the patient’s needs, not the physician’s judgment.[114] Courts measure a physician’s duty of disclosure by the “prudent patient” or “materiality of risk” standard—an objective standard.[115] A physician must disclose all material information that a prudent patient may find significant when deciding to undergo a proposed treatment.[116] While most courts limit action for informed consent to the nondisclosure of medical information, some courts have recognized that financial conflicts of interest that may influence a patient’s and a physician’s decisions are disclosable under the informed consent doctrine and as part of a physician’s fiduciary duty to patients.[117]

In Sanchez v. Sirmons, a New York trial court examined informed consent’s role in the pre-dispute binding arbitration agreements.[118] A patient sought to stay arbitration of a medical malpractice claim, and the court held that the arbitration clause contained within a “Consent to Abortion” form provided to and signed by the patient was not enforceable because the physician could not show that the patient made an informed and knowledgeable waiver of her constitutional right to a jury trial.[119] The court initially rejected the argument that the arbitration clause was unenforceable as a component of an adhesion contract.[120] The court reasoned that the petitioner was not confronted with a medical emergency and could have sought an elective abortion elsewhere without being compelled to arbitrate any alleged medical malpractice claims.[121] However, the court acknowledged that waiving a fundamental constitutional right requires a knowing, voluntary, and intelligent waiver.[122] In quoting Wheeler, the court stated:

The law ought not to decree a forfeiture of such a valuable right where the patient has not been made aware of the existence of an arbitration provision or its implications. Absent notification and at least some explanation, the patient cannot be said to have exercised a ‘real choice’ in selecting arbitration over litigation.[123]

The court also noted that a patient’s circumstances under which they sign an agreement are relevant for consideration and that the “exigencies of a patient’s physical or mental distress may…interfere with a voluntary and rational election of arbitration.[124]

The Court of Appeals in the First District of California examined the enforceability of an arbitration agreement contained in a patient’s admission paperwork in Ramirez v. Superior Court.[125] The court held that the patient, who signed an admission agreement drafted in compliance with state statutes and provided for arbitration of all medical malpractice claims, should have the opportunity to demonstrate that she was either coerced or did not read the provided waiver notices hand had no awareness that the signing the agreement indicated her agreement to arbitrate.[126] The court reasoned that when a patient has made no knowledgeable or voluntary agreement to arbitration, a court abuses its discretion if it compels arbitration.[127]

B. The Anatomy of a Physician’s Fiduciary Duty

Physicians hold positions of dominance over their patients in unequal relationships. Physicians focus on the business of healthcare, while patients focus on their personal health interests—often in a state of anxiety, stress, and infirmity. Furthermore, physicians can typically find another patient more easily and quickly than a patient can find an alternative healthcare provider. Therefore, patients are vulnerable, which necessitates an imposition of trustworthiness on physicians, a fiduciary duty justified by the nature of the physician-patient relationship.[128]

A core element of that fiduciary duty is to disclose any existing conflicts of interest to patients.[129] The fee-for-service payment model in healthcare creates inherent conflicts between physicians and patients that can influence decisions by both physicians and patients.[130] Courts have involved fiduciary concepts in describing physician duties to disclose conflicts of interest to patients, including those of a financial nature. Providers develop pre-dispute binding arbitration agreements unilaterally and in furtherance of their self-interests; thus, there is no meeting of the minds and no bargained-for terms. The inequitable nature of pre-dispute binding arbitration agreements by medical providers, therefore, defeats the purpose of the informed consent doctrine.

C. The Case for Breach of a Physician’s Fiduciary Duty

The North Carolina Supreme Court recently established its framework for arguing against the enforceability of a pre-dispute binding arbitration clause required as a condition for treatment. In the 2017 case King v. Bryant, the Court determined that an arbitration agreement was unenforceable because a surgeon and medical provider violated their fiduciary duty to a patient by failing to make full disclosure of the nature and import of the arbitration agreement to the patient at or before the time that they presented it for the patient’s signature.[131] The Court first addressed physicians’ de facto fiduciary duty to their patients and established a precedent for examining pre-dispute binding arbitration agreements.

Mr. King received a referral from his primary care physician to a surgeon to treat an acute medical condition. [132] Upon arriving at the surgeon’s office for his first encounter, the registration staff required Mr. King to provide confidential medical information and sign multiple documents.[133] Amongst those documents, which included typical registration forms, notices, disclosures, and inquiries for demographic and insurance information, was a “poorly drafted, confusing, and nonsensical” arbitration agreement that failed to define “arbitration.”[134] The agreement further failed to advise Mr. King that by affixing his signature to the agreement, he would waive his rights to a jury trial.[135] Moreover, the agreement failed to advise Mr. King to consult with an attorney before signing.[136]

The Court noted that Mr. King lacked any education beyond high school and had limited exposure to legal documents.[137] Therefore, he signed the arbitration agreement without understanding its importance, function, or optional nature.[138] After signing the agreement along with the other myriad of intake forms, Mr. King met with the surgeon. He subsequently received treatment resulting in an alleged injury during surgery.[139]

In response to Mr. King’s complaint, the surgeon sought to compel arbitration and, following an appeal to and remand to the North Carolina Supreme Court, the trial court denied the motion.[140] The trial court concluded that the surgeon owed Mr. King a fiduciary duty and breached that duty by failing to disclose all material terms of the arbitration agreement.[141] Accordingly, on a second appeal, the North Carolina Supreme Court affirmed the trial court’s determination and permitted discretionary review.[142]

The Court determined that the facts revealed a de facto fiduciary relationship between Mr. King and the surgeon. Mr. King (1) received a referral to the surgeon from his primary care physician—who already had a de jure fiduciary duty to Mr. King, (2) sought out the surgeon for his specialized skill and knowledge, (3) provided the surgeon with confidential medical information on arrival and before being seen, and Mr. King “had received a limited education and had little to no experience interpreting legal documents.[143] The surgeon and the surgeon’s staff failed to bring the agreement to Mr. King’s attention or explain it to him. At a minimum, the surgeon could have worded the agreement more clearly and not placed the agreement within an extensive collection of documents, thereby creating the reasonable impression that the arbitration agreement was nothing more than another routine document requiring a signature as a condition to become a patient. The Court reasoned:

Regardless of whether a physician-patient relationship existed between Mr. King and [the surgeon] at the time that the arbitration agreement was signed, there was a confidential relationship between them at that point. It is difficult for us to see how one could reach any conclusion other than that Mr. King reposed trust and confidence in [the surgeon], to whom he had been referred by his family physician for the purpose of receiving surgical treatment….We hold that the arbitration agreement at issue in this case was obtained as a result of defendants’ breach of a fiduciary duty that they owed to Mr. King.[144]

To find a breach of fiduciary duty, the parties must establish a fiduciary relationship.[145] The Court noted inherently fiduciary relationships to include those between spouses, attorney and client, trustee and beneficiary, members of a partnership, and physician and patient.[146] The Court expressly described relationships between a physician and patient as one “where there has been a special confidence reposed in one who in equity and good conscience is bound to act in good faith and with due regard to the interests of the one reposing confidence…and the resulting superiority and influence on the other.”[147] The Court further explained that where a relationship of trust and confidence exists between parties, the fiduciary has a duty to disclose all material facts, and failure to do so constitutes a breach of fiduciary duty.[148]

Interestingly, the Court then noted that the elements of a claim for breach of a fiduciary relationship parallel those for constructive fraud. Constructive fraud is a “breach of legal or equitable duty which, irrespective of the moral guilt of the offending party, the law declares fraudulent because of its tendency to deceive others, to violate public or private confidence, or to injure public interests.”[149] The elements of constructive fraud are (1) a duty owed; (2) a violation of that duty through deceptive material misrepresentations of past or existing facts or remaining silent when a duty to speak exists; (3) reliance by the offended party; (4) injury as a proximate result; and (5) an advantage gained by the offending party at the expense of the offended party.[150]

Explicitly, the King Court affirmed that a healthcare provider commits fraud in the inducement of an arbitration agreement by breaching the fiduciary duty in making the agreement to arbitrate.[151] Here, the surgeon and his agents breached their fiduciary duties by failing to disclose to Mr. King all material terms of the Agreement and failing to deal with him openly, fairly, honestly, and without imposition, oppression, or fraud in procuring his signature on the arbitration agreement. Importantly, the Court did make clear that nothing prohibits the ability of physicians and patients from executing appropriately drafted agreements providing for arbitration of disputes so long as the provider facilitates proper disclosure.[152]

VIII. Conclusion: Actions That Arbitrators and States Should Take to Protect Patients

The courts are clear that arbitrators are the gatekeepers to arbitrability. Arbitrators are best positioned to determine whether parties can bring a dispute to arbitration. Therefore, arbitrators are responsible for examining fairness in contract, ensuring fairness of process, and providing fairness in outcomes. In medical malpractice claims, the circumstances surrounding the contracting process may raise questions of fairness and, in the case of Mr. King, questions of fraud. In medical malpractice claims submitted for arbitration, arbitrators should examine whether the patient knowingly and voluntarily agreed to waive the right to a jury trial.

When evaluating that question in the context of medical malpractice claims, arbitrators should consider the vulnerable position of the patient and the circumstances within which a patient signed a pre-dispute binding arbitration agreement. When healthcare providers include arbitration agreements in and amongst patient intake forms, providers must oblige their fiduciary duties to their patients by creating awareness of the agreements, informing patients of the functions of the arbitration agreements, and disclosing to patients their options. Furthermore, in circumstances where patients might feel obligated to seek urgent or emergent care resulting from injury or severe infirmity, providers must not condition the provision of treatment on whether the patient agrees to arbitration.

A patient requiring medical care should not need an attorney to review patient intake paperwork to identify and explain an arbitration agreement intended to protect the physician through a waiver of the patient’s rights. A patient should not have to question whether a conflict of interest may result in a physician violating the patient’s trust. A patient should not have to waive rights as a condition to receive care, particularly when in a heightened position of vulnerability caused by suffering from injury or illness. While the rules of conduct call for arbitrators to act as neutrals, medical malpractice claims presented for arbitration require an arbitrator to serve, at least partially and temporarily, as a patient advocate to ensure fairness.

States also have begun to recognize the vulnerable position of patients deceived into signing binding arbitration agreements before receiving care from their physicians. Colorado’s Health Care Availability Act provides its citizens with statutory protection by giving them ninety days to rescind a binding arbitration agreement in writing without risking denial of care.[153] Several states maintain similar laws permitting their citizens to rescind the agreement within a limited period following their signing of the agreement.[154] Georgia statutorily prohibits arbitration agreements to cover future medical malpractice or personal injury claims.[155] Alaska permits pre-dispute binding arbitration agreements so long as they are not a condition of providing services.[156] While many states have passed laws to protect patients from pre-dispute binding arbitration agreements, all should recognize patients’ vulnerability and take meaningful measures to protect patients. These measures should include statutory prohibitions against conditioning care on a patient’s willingness to agree to arbitration, providing a revocation period of at least thirty days, and mandatory disclosure of terms with acknowledgement of notice by the patient.

[1] SC Panda, Medicine: science or art?, Vol. 4, No. 1 Mens Sana Monogr. 127, 135 (2006).

[2] Joseph S. Kass, MD, JD & Rachel V. Rose, JD, MBA, Medical Malpractice Reform: Historical Approaches, Alternative Models, and Communication and Resolution Programs, 3 AMA J. Ethics 299 (2016). Medical malpractice claims began to appear in the 1800s. In the 1960s, medical malpractice claims in the U.S. increased dramatically driven by new and more complex treatments with higher risk of patient injury and a changing legal landscape that removed many barriers to lawsuits and liability protections for healthcare providers.

[3] R. Wayne Thorpe, Esq., Effective Use of Mediation and Arbitration in Health Care Disputes, Vol. 4, No. 7 Bloomberg Law Reports—Health Law (2011).

[4] Ibid.

[5] Ibid.

[6] John E. Rolph, Elizabeth S. Rolph, & Erik Moller, Binding Arbitration is Not Frequently Used to Resolve Health Care Disputes, Rand Corporation 1 (2021), https://www.rand.org/pubs/research_briefs/RB9030.html.

[7] Paul Starr, The Social Transformation of American Medicine: The Rise of a Sovereign Profession & the Making of a Vast Industry 455 (2nd ed. 2017). Ronald Reagan signed into law a change in Medicare that altered the government’s payment methodology for hospitals from retrospective, cost-based payments to prospective payment rates set in advance for each episode of inpatient treatment according to a patient’s diagnosis (diagnostic-related group, or “DRG”). For the first time, and by the government’s hand, hospitals were at risk for the costs they incurred for each admission. Moreover, states began allowing insurers to contract selectively with physicians and hospitals. This change resulted in the acceleration of alternatives to unrestricted, fee-for-service insurance, including HMOs, PPOs, and point-of-service plans. These two changes ushered in the “managed-care revolution.”

[8] Id. at 456.

[9] Health Care Fraud Unit, 2021 National Health Care Fraud Enforcement Action, The U.S. Dep’t of Justice (Sept. 20, 2021), https://www.justice.gov/criminal-fraud/2021-national-health-care-fraud-enforcement-action.

[10] Rolph, supra note 6.

[11] Ibid.

[12] Chad Egan Burton, EEOC v. Waffle House: employers win, again: the U.S. Supreme Court handed employees who sign mandatory arbitration agreements a hollow victory because the EEOC brings so few cases in court., Def. Council J., January 1, 2004, at 2.

[13] Ibid.

[14] 9 U.S.C. § 2; see, e.g., AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011).

[15] Kenneth A. DeVille, The Jury Is Out: Pre-Dispute Binding Arbitration Agreements for Medical Malpractice

Claims: Law, Ethics, and Prudence, 28 J. Legal Med. 333 (2007).

[16] Volt Info. Scis., Inc. v. Bd. Of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 477 (1989).

[17] Ibid.

[18] 9 U.S.C. § 2 (2022).

[19] Jodi Wilson, How the Supreme Court Thwarted the Purpose of the Federal Arbitration Act, 63 Case W. Rsrv L. Rev. 92, 126 (2012); see, e.g., Southland Corp. v. Keating, 465 U.S. 1, 11 (1984) (the Federal Arbitration Act rests on the authority of Congress to enact substantive rules under the Commerce Clause); Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 405 (1967) (the statute is based on the incontestable federal foundations of control over interstate commerce and admiralty) (citing H.R.Rep.No.96, 68th Cong., 1st Sess., 1 (1924)).

[20] See, e.g., Alexander v. Gardner-Denver Co., 415 U.S. 36 (1974); Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991); Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001).

[21] 513 U.S. 265 (1995).

[22] Id. at 273 (quoting U.S. v. American Building Maintenance Industries, 422 U.S. 271, 276 (1975).

[23] Ibid.

[24] Id. at 274 (citing 482 U.S. 483, 490 (1987)).

[25] Id. at 275.

[26] See Am. Express Co. v. Italian Colors Rest., 570 U.S. 228, 236 (2013) (claimants must demonstrate that they cannot vindicate their federal statutory rights by showing that they are stripped of the right to pursue them and not the ability to pursue them); CompuCredit Corp. v. Greenwood, 565 U.S. 95, 98 (2012) (federal statutory claims are arbitrable absent an explicit “contrary congressional command”); AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339-40 (2011) (the Federal Arbitration Act preempts state law unconscionability defense that declares class action waivers in consumer arbitration agreements unconscionable as inconsistent with the Act).

[27] Jon O. Shimabukuro & Jennifer A. Staman, Mandatory Arbitration and the Federal Arbitration Act, Congressional Research Service, Sept. 20, 2017, 5.

[28] 9 U.S.C. § 1 (1947), et seq.

[29] Amanda Perwin, Mandatory Binding Arbitration: Civil Injustice By Corporate America, Ctr. for Justice and Democracy, Aug. 2005, at 1.

[30] Id. at 1-2.

[31] Id.at 2

[32] Ibid.

[33] Ibid.

[34] Stephanie Korenman, What Does the Federal Arbitration Act’s “Policy Favoring Arbitration” Really Favor? Arbitration as a Way of Settling Disputes Rather than “Deciding” Cases, Arbitrate.com (August 16, 2022), https://arbitrate.com/what-does-the-federal-arbitration-acts-policy-favoring-arbitration-really-favor-arbitration-as-a-way-of-settling-disputes-rather-than-deciding-cases/.

[35] Perwin, supra note 29.

[36] Alex Stein, Undisclosed Arbitration Clause in the Doctor-Patient Agreement Held Unenforceable, Bill of Health: Examining the Intersection of Health Law, Biotechnology, and Bioethics (March 13, 2018), https://blog.petrieflom.law.harvard.edu/2018/03/23/undisclosed-arbitration-clause-in-the-doctor-patient-agreement-held-unenforceable/.

[37] AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 344 (2011) (Arbitration agreements are valid, irrevocable, and enforceable as written); see also Kindred Nursing Centers Ltd. P'ship v. Clark, 137 S. Ct. 1421 (2017) (Kentucky’s clear-statement rule requiring an explicit statement in a power of attorney that the attorney-in-fact has authority to waive the principal’s state constitutional rights to a jury trial where an attorney-in-fact signed a pre-dispute binding arbitration agreement for a nursing home resident disfavors arbitration agreements and is preempted by the Federal Arbitration Act).

[38] James Oldham & Su Jin Kim, Arbitration in America: The Early History, 31 L. & Hist. Rev. 241, 246

(2013); see also Jean R. Sternlight, Creeping Mandatory Arbitration: Is It Just?, 57 Stan. L. Rev. 1631, 1635 (2005).

[39] Richard Fincher, et al., An Examination of the Arbitration Fairness Act of 2009, Association for Conflict Resolution: Task Force Report 32 (2009); see, e.g., United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564 (1960); United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960) (the Court endorses the use of arbitrators for their specialized expertise).

[40] Liliana Burnett, The Current State of Arbitration Clauses Within Native American Tribal Contracts: An Examination of Binding Arbitration Contracts in Native American Payday Lending, 4 Arb. Brief 142, 144 (2014).

[41] Sternlight, supra note 38 at 1636.

[42] Ibid.; see, e.g., Tobey v. Cnty. of Bristol, 23 F. Cas. 1313, 1319 (C.C.D. Mass. 1845) (the court refused to enforce a pre-dispute agreement to arbitrate, citing inequity and impracticability); William L. Noyes v. John F. Marsh & Another, 123 Mass. 286, 287 (1877) (a court of equity will not decree specific performance of an agreement to submit a matter to arbitration).

[43] Sternlight, supra note 41, at 1636-37.

[44] 346 U.S. 427, 438 (1953).

[45] 460 U.S. 1, 25 (1983).

[46] 490 U.S. 477, 484 (1989).

[47] See, e.g., AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011); Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1621 (2018); Morgan v. Sundance, Inc., 142 S. Ct. 1708, 1709 (2022).

[48] Wilson, supra note 19.

[49] Rolph, supra note 10.

[50] See, e.g., Lovenberg & Assoc., The Myth of the Frivolous Malpractice Suit, Boston Medical Malpractice Lawyer, https://lovenberglaw.com/2016/05/the-myth-of-the-frivolous-malpractice-suit/ (last visited October 24, 2022); Paul & Perkins, Frivolous Medical Negligence Cases, https://paulandperkins.com/signs-of-malpractice/frivolous-medical-negligence-cases/ (last accessed October 24, 2022); see also David M. Studdert, LL.B, Sc.D., M.P.H., et al., Claims, Errors, and Compensation Payments in Medical Malpractice Litigation, 354 N. Eng. J. Med. 2024 (2006) (a study found that medical malpractice cases are typically not baseless, with more than 80% resulting in significant or major disability and 26% resulting in death; 72% of claims that did not involve medical error did not receive compensation).

[51] Meagan Cline, What is Tort Reform and How Does it Affect My Healthcare Negligence Claim?, MedMalFirm.com, (December 22, 2021), https://www.medmalfirm.com/news-and-updates/what-is-tort-reform/#:~:text=In%20terms%20of%20medical%20malpractice,in%20lowered%20malpractice%20insurance%20premiums.

[52] Allen Kachalia M.D., J.D., and Michelle M. Mello, J.D., Ph.D., New Directions in Medical Liability Reform, 364 N. Eng. J. Med 1564 (2011).

[53] Michelle M. Mello, Amitabh Chandra, Atul A. Gawande, & David M. Studdert, National Costs Of The Medical Liability System, 29 Health Affairs 1569, (2010).

[54] Rolph, supra note 49.

[55] Ibid.

[56] Ibid.

[57] Ibid. Hospitals generally did indicate familiarity with arbitration agreements.

[58] Ibid.

[59] Ibid.

[60] Ibid.

[61] Ibid.

[62] David Allen Larson, Medical Malpractice Arbitration: Not Business as Usual, 8 Y.B. Arb. & Mediation 69, 71-5 (2016) (Courts generally enforce medical malpractice arbitration agreements with pre-dispute terms binding the parties to arbitration).

[63] Id. at 74; see also Medical Malpractice State Laws Regarding Alternative Dispute Resolution (ADR) And Screening Panels, MedicalMalpracticeLawyers.com, https://medicalmalpracticelawyers.com/medical-malpractice-state-laws-regarding-alternative-dispute-resolution-adr-and-screening-panels/ (last visited November 22, 2022). States with specific legislation regarding binding arbitration in medical malpractice cases include Alabama, California, Colorado, Florida, Illinois, Louisiana, Maine, Michigan, New York, Ohio, South Carolina, Utah, and Virginia.

[64] Perwin, supra note 35, at 3.

[65] Ibid.

[66] Hassakis & Hassakis, P.C., Beware of Hospital & Nursing Home Arbitration Agreements, https://hassakislaw.com/articles/beware-of-hospital-nursing-home-arbitration-agreements/ (last visited November 26, 2022).

[67] Ibid.

[68] Ibid.

[69] Perwin, supra note 64.

[70] Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444 (2003).

[71] Perwin, supra note 69, at 7.

[72] American Arbitration Association, et al., Healthcare Due Process Protocol Final Report 16 (July 27, 1998). “ADR means “Alternative Dispute Resolution.”

[73] Ciccio v. SmileDirectClub, LLC, 2 F.4th 577 (6th Cir. 2021). Plaintiffs filed a false advertising claim against SmileDirectClub and a federal court ordered arbitration in compliance with a customer contract. A former plaintiff subsequently filed an arbitration claim against SmileDirectClub on behalf of a class of patients, arguing that the AAA’s Healthcare Policy required the parties to sign post-dispute arbitration agreements unless a court had compelled arbitration. The former plaintiff refused to sign a post-dispute arbitration agreement. SmileDirectClub objected claiming that the parties agreed to arbitrate all disputes, including “gateway issues about whether the dispute was arbitrable.” The majority held that the AAA does not have the authority to make “gateway” decisions of arbitrability. Instead, such decisions are for the arbitrator.

[74] Id. at 583; see also Blanton v. Domino's Pizza Franchising LLC, 962 F.3d 842, 844 (6th Cir. 2020); Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 529 (2019).

[75] Ibid.

[76]Henry Schein, Inc., 139 S. Ct. at 529; see Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (2010).

[77] Larson, supra note 62, at 75.

[78] Ibid.

[79] Broemmer v. Abortion Servs. of Phoenix, Ltd., 840 P.2d 1013, 1016 (1992); see also Graham v. Scissor-Tail, Inc., 171 Cal.Rptr. 604, 612 (1981); Huff v. Bekins Moving & Storage Co., 145 Ariz. 496, 498 (App.1985).

[80] Ibid.

[81] Ibid.

[82] Unconscionable, The Merriam-Webster Dictionary (12th ed. 2016).

[83] Eyre v. Potter, 56 U.S. 42, 60 (1853).

[84] Brenner v. Little Red School House, Ltd., 302 N.C. 207, 213 (1981).

[85] Rite Color Chem. Co. v. Velvet Textile Co., 105 N.C. App. 14, 19 (1992).

[86] AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 340 (2011).

[87] Restraint from interference with private parties’ abilities to contract is rooted in the Lochner Era cases, most prominently with Lochner v. New York, in which the U.S. Supreme Court invalidated state statutes that presented “meddlesome interferences with the rights of the individual” and “undue interference with liberty of person and freedom of contract.” 198 U.S. 45 (1905).

[88] Rivera v. Centro Medico de Turabo, Inc., 575 F.3d 10, 18 (1st Cir. 2009); see also Wilkerson ex rel. Est. of Wilkerson v. Nelson, 395 F. Supp. 2d 281, 284 (M.D.N.C. 2005) (Court enforced an arbitration clause contained in “a form typically furnished to and completed by patients while in the waiting room” that also included a statement of financial responsibility and insurance authorization).

[89] Wilkerson ex rel. Est. of Wilkerson v. Nelson, 395 F. Supp. 2d 281, 284 (M.D.N.C. 2005)

[90] See, e.g., Lindemann v. Eli Lilly & Co., 816 F.2d 199, 204 (5th Cir. 1987) (finding no procedural unconscionability where the parties engaged in transactions over the course of twenty years, emphasizing that the principle of unconscionability is one of preventing “oppression” and “unfair surprise”).

[91] See, e.g., Navellier v. Sletten, 262 F.3d 923, 940 (9th Cir. 2001); Brown v. Genesis Healthcare Corp., 729 S.E.2d 217, 226 (2012).

[92] A contract of adhesion is a standardized contract that is imposed and drafted by the party of superior bargaining strength and relegates to the other party “‘only the opportunity to adhere to the contract or reject it.’…Adhesion contracts are routine in modern-day commerce, and at least one commentator has suggested they are worthy of neither praise nor condemnation, only analysis. (1 Corbin on Contracts (1993) § 1.4, p. 14.) If a court finds a contract to be adhesive, it must then determine whether “‘other factors are present which, under established legal rules—legislative or judicial—operate to render it’” unenforceable. Higgins v. Superior Ct., 140 Cal. App. 4th 1238, 1248, (2006).

[93] Colo. Rev. Stat. § 13-64-403 (2019).

[94] Ibid.

[95] Ibid.

[96] Ibid.

[97] John Edward Murray, Jr., Murray on Contracts § 96 547-49 (4th ed. 2001).

[98] See, e.g., Fields v. NCR Corp., 683 F. Supp. 2d 980, 988 (S.D. Iowa 2010) (“Given that Plaintiff does not claim a lack of receipt of the [standard form policy], Plaintiff’s surprise at the terms therein can hardly be characterized as ‘unfair.’”); Lovey v. Regence BlueShield of Idaho, 72 P.3d 877, 883 (Idaho 2003) (“[A]n adhesion contract cannot be held procedurally unconscionable solely because there was no bargaining over the terms. Adhesion contracts are a fact of modern life. They are not against public policy.”).

[99] Myriam Gilles, Operation Arbitration: Privatizing Medical Malpractice Claims, 15 Theoretical Inquiries in L. 671, 688 n.71 (2014).

[100] Wheeler v. St. Joseph Hosp., 133 Cal. Rptr. 775, 786-87 (Ct. App. 1976). The court determined that making the patient aware of the arbitration clause incorporated in the hospital's “Conditions of Admission” form only required the admission clerk to direct the patient's attention to the provision, request him to read it, and give him a simple explanation of its purpose and effect, including available options.

[101] State statutes set forth the elements of informed consent. See, e.g., Jandre v. Physicians Ins. Co. of Wisconsin, 792 N.W.2d 558, 564 (2010) (Wis. Stat. § 448.30 requires any physician who treats a patient to inform the patient about the availability of all alternate, viable medical modes of treatment, including diagnosis, as well as the benefits and risks of such treatments); Fanguy v. Lexington Ins. Co., 210 So. 3d 483, 492 (2016) (The Louisiana Informed Consent Law requires a physician to provide his patient with sufficient information to allow the patient to make an informed and intelligent decision on whether to submit to the proposed course of treatment. This information should include, if possible, the nature of the pertinent ailment or condition, the general nature of the proposed treatment or procedure, the risks involved in the treatment or procedure, the prospects of success, the risks of failing to undergo any treatment or procedure at all, and the risks of any alternative methods of treatment. A physician must also inform the patient of any alternatives to a surgical procedure.).

[102] In re Quinlan, 355 A.2d 647, (1976) (court held that the Constitution guarantees individuals the right to direct

their own medical care). Federal courts have subsequently and repeatedly held that patients do not have a fundamental right to access medical procedures under the Due Process Clause. See, e.g., Abigail All. for Better

Access to Developmental Drugs v. von Eschenbach, 495 F.3d 695 (D.C. Cir. 2007) (terminally ill adult patients had no fundamental right protected by Due Process Clause to have access to investigational drugs); Morrissey v. United States, 871 F.3d 1260 (11th Cir. 2017) (an asserted right to reproduction assisted by IVF and surrogacy was not a fundamental right); Raich v. Gonzales, 500 F.3d 850, 864 (9th Cir. 2007) (there is no fundamental right to use marijuana to preserve bodily integrity, avoid pain, and preserve life); Rutherford v. United States, 616 F.2d

455, 456 (10th Cir. 1980) (terminally ill cancer patients had no affirmative right “to take whatever treatment they wished regardless of whether the FDA regarded the medication as ‘effective’ or ‘safe”).

[103] Peavy by Peavy v. Skilled Healthcare Grp., Inc., 470 P.3d 218, 222 (2020).

[104] Martin Domke et al., § 16:91. Unconscionability, 1 Domke on Com. Arb. (2010); see, e.g., Vicksburg Partners, L.P. v. Stephens, 911 So. 2d 507 (Miss. 2005), (overruled on other grounds), Broemmer v. Abortion Servs. of Phoenix, Ltd., 840 P.2d 1013 (1992).

[105] 270 Cal. Rptr. 3d 786 (2020).

[106] Id. at 798.

[107] Ibid.

[108] Larson, supra note 77 at 75.

[109] Wilkerson ex rel. Est. of Wilkerson v. Nelson, 395 F. Supp. 2d 281, 289–90 (M.D.N.C. 2005).

[110] Blazoski v. Cook, 787 A.2d 910, 917 (App. Div. 2002).

[111] Salgo v. Leland Stanford Jr. Univ. Bd. of Trustees, 154 Cal. App. 2d 560 (1957) (A physician violates his duty to his patient and subjects himself to liability if he withholds any facts which are necessary to form the basis of an intelligent consent by the patient to the proposed treatment, and physician may not minimize known dangers to induce his patient's consent; but patient's mental and emotional condition is important, and in discussing the element of risk a physician must employ a certain amount of discretion consistent with full disclosure of facts necessary to informed consent.)

[112] Robert John Kane, J.D., The Law of Medical Practice in Illinois, 22 Ill. Prac., § 31:32 (3d ed. 2022).

[113] Schloendorff v. Soc'y of New York Hosp., 105 N.E. 92 (1914).

[114] Blazoski, 787 A.2d at 917.

[115] Ibid.

[116] Ibid.

[117] Id. at 919 (Actions for informed consent are limited to the nondisclosure of medical information).

[118] 467 N.Y.S.2d 757 (Sup. Ct. 1983).

[119] Ibid.

[120] Id. at 759.

[121] Ibid.

[122] Id. at 760.

[123] Ibid.

[124] Ibid. See also Jacqueline R. Bau, Medical Malpractice Arbitration: A Patient's Perspective, 61 Wash.Univ.L.Q. 123, 144 (January 1983).

[125] 163 Cal. Rptr. 223 (Ct. App. 1980).

[126] Ibid.

[127] Id. at 226.

[128] See generally, American Medical Association, AMA Principles of Medical Ethics, https://code-medical-ethics.ama-assn.org/ (last visited November 29, 2022).

[129] Id. at 11.2.2.

[130] See generally, Marc A. Rodwin, Medicine, Money & Morals: Physicians’ Conflicts of Interest, 10 J. of Contemp. Health L. & Pol’y, 629 (1994).

[131] 795 S.E.2d 340 (2017).

[132] Id. at 344.

[133] Ibid.

[134] Ibid.

[135] Ibid.

[136] Ibid.

[137] Id. at 343.

[138] Ibid.

[139] Id. at 342-43.

[140] Id. at 344-46.

[141] Ibid.

[142] Id. at 347.

[143] Id. at 350.

[144] Id. at 352.

[145] Id. at 348 (citing Dalton v. Camp, 548 S.E.2d 704, 707 (2001)).

[146] Id. at 349.

[147] Ibid.

[148] Ibid.

[149] Kapoor v. Dybwad, 49 N.E.3d 108, 124 (Ind. Ct. App. 2015).

[150] Ibid.

[151] King, 795 S.E.2d at 351.

[152] Id. at 352.

[153] Colo. Rev. Stat. § 13-64-403 (2019).

[154] Ohio Rev. Code § 2711.23(B) (2003) (provides a revocation period of thirty days); Alaska Stat. § 0955.535 (2007) (provides a revocation period of thirty days); Utah Code § 78B-3-421(1)(a)(vii) (2014) (provides a revocation period of ten days).

[155] Ga. Code § 9-9-62 (2010).

[156] Alaska Stat. § 0955.535 (2007).

Landon Tooke