Florida Supreme Court voids private arbitration agreement to adjudicate medical malpractice complaints

June 20, 2013

Franks v. Bowers, — So.3d —, 2013 WL 3064807 (Fla. 2013)

Doctors attempted to force arbitration on their former patient’s widow, who sued them for her husband’s wrongful death claiming that he died due to the doctors’ surgical error. The doctors relied on an arbitration agreement that the patient signed prior to his first visit. The agreement capped the patient’s recovery for noneconomic damages at $250,000—four times below the statutory cap of $1,000,000. Florida’s Medical Malpractice Act (MMA) allows parties to arbitrate medical malpractice claims pursuant to a prior agreement that preserves the patient’s rights to compensation. Such agreements are valid and enforceable.

The Florida Supreme Court held that “Because the Legislature explicitly found that the MMA was necessary to lower the costs of medical care in this State, we find that any contract that seeks to enjoy the benefits of the arbitration provisions under the statutory scheme must necessarily adopt all of its provisions.” The Court also decided that the agreement’s under-compensation provision is not severable from the rest of the agreement. Correspondingly, it ruled that the entire agreement is invalid and unenforceable.

In my opinion, this decision squarely aligns with the Federal Arbitration Act, Section 2, as interpreted in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011). This section provides that a written arbitration agreement “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” An arbitration agreement formed in Florida must comply with the State’s statutory requirements for arbitration, including preservation of remedies. Failure to comply with these requirements is one of the “grounds as exist at law or in equity for the revocation of any contract” (University of Miami v. Echarte, 618 So.2d 189 (Fla. 1993)).

My colleague, Myriam Gilles, an expert on FAA, believes that there is more room for private arbitration than allowed in today’s decision of the Florida Supreme Court.  See here andhere.