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Primary Care Providers Win Challenge of CMS Interpretation of Enhanced Payment Law

With the help and support of the Tennessee Medical Association, 21 Tennessee physicians of underserved communities joined together and retained Bass, Berry & Sims to file suit against the Centers for Medicare & Medicaid Services to stop improper collection efforts. Our team, led by David King, was successful in halting efforts to recoup TennCare payments that were used legitimately to expand services in communities that needed them. Read more

Tennessee Medical Association & Bass, Berry & Sims

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Healthcare Transactions: Year in Review 2018Last year, CVS Health Corp. (NYSE: CVS) announced it would purchase health insurer Aetna Inc. (NYSE: AET) for $67.5 billion, a transaction that would be one of the biggest healthcare mergers in the past decade. The transaction raises an intriguing question: is this the beginning of a transformational shift in healthcare?

Recently, members of our healthcare group authored the Healthcare Transactions: Year in Review outlining 2017 M&A activity and drivers in the following hot healthcare sectors:

• Managed Care
• Hospitals
• Post-Acute Care—Home Health & Hospice
• Ambulatory Surgery Centers (ASCs)
• Healthcare Information Technology (HIT)
• Behavioral Health
• Physician Practice Management

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Chris Lazarini Comments on Court's Denial of a Motion to Vacate an Arbitration Award


October 13, 2014

Chris Lazarini commented on the applicability of the manifest disregard of the law standard that was rejected in McCulloch vs. Janney Montgomery Scott LLC. Chris provided the analysis for Securities Litigation Commentator. The full text of the analysis is below and used with permission from the publication. If you would like to receive additional content from the Securities Litigation Commentator, please click here to sign up for the newsletter.

McCulloch vs. Janney Montgomery Scott LLC No 13 CO 40 (Ohio App, 7Dist, 9/8/14)

Arbitration Awards will generally not be vacated when a reviewing court is asked to apply the manifest disregard of the law standard by examining whether the arbitrators decided the facts incorrectly, made an error in judgment or misapplied the law.

This case concerns an appeal from the trial court's denial of Plaintiffs' motion to vacate an arbitration Award. The underlying arbitration was a classic raiding case. Plaintiff McCulloch was the most senior officer in Janney Montgomery Scotts ("JMS") Salem, Ohio branch and, together with most of his management team, resigned from JMS and joined Hunter Associates. JMS closed its Salem branch and filed a FINRA arbitration on claims of raiding, unfair competition, tortious interference with business relationships, civil conspiracy, breach of fiduciary duty and inducement to breach of fiduciary duty. The arbitration panel awarded JMS $2.4 million in damages plus post-judgment interest, jointly and severally, against McCulloch and Hunter Associates (FINRA 10 #11-02078 (Cleveland, 11/9/12)). The panel did not issue a reasoned Award. McCulloch and Hunter Associates filed a state court action to vacate the Award on the grounds that the arbitrators exceeded their authority and manifestly disregarded the law. The trial court denied the vacatur request and confirmed the Award, holding that the arbitrators did not exceed their authority, but did not apply the manifest disregard of the law standard. On appeal, the Court first considers Plaintiffs' argument that the trial court erred in not addressing manifest disregard. The Court acknowledges that the Sixth Circuit recognizes manifest disregard of the law, but questions its continuing applicability because the standard was born in an era of judicial hostility to arbitration. Recognizing the strong public policy in Ohio favoring arbitration and the fact that the Ohio Supreme Court has not yet decided whether to adopt manifest disregard, the Court ultimately determines that it does not need to decide the question, because the arbitrators did not commit error even if manifest disregard of the law applies. The Court then explains why each of Plaintiffs' other assignments of error fail. Plaintiffs argued that the arbitration panel exceeded its authority and acted in manifest disregard of the law because raiding and inducement to breach fiduciary duty are not cognizable actions in Ohio and because JMS otherwise failed to prove its claims. The Court rejects these arguments on several grounds. First, it cites well-settled authority that arbitrator errors in fact or law alone are not grounds for vacating an Award. Second, it recognizes that FINRA rules only require notice pleading and concludes that the facts supporting the "raiding" claim could well have supported several recognized causes of action in Ohio. Finally, the Court holds that the panel's decision is entitled to deference because of the specialized knowledge of the arbitrators in this industry dispute. Plaintiffs' final argument was that the panel erred in awarding joint and several damages because the only claim that was pled jointly and severally was the civil conspiracy claim and because JMS failed to prove an underlying wrongful act independent of the alleged conspiracy. Rejecting this argument, the Court discerns a basis for joint and several liability because the entire case was predicated on concerted activity that harmed JMS.

Although often raised in vacatur proceedings, the manifest disregard of the law standard is narrowly defined, difficult to support and the challenging party's uphill battle is made even more steep when faced with a non-reasoned Award.

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