Court Grants Motion to Entirety of Case Pending Arbitration, Finding Federal Arbitration Act Mandates Stay of All Claims, Including Non-Arbitrable Ones, When Arbitrable Claims Are Factually Intertwined and Dominate the Case

The defendants, a number of medical entities and providers, filed a motion to stay federal litigation based on New York causes of action pending the resolution of New Jersey arbitrable claims. 

The court granted the defendants’ motion to stay the entirety of the case pending arbitration. It found that the Federal Arbitration Act mandates a stay of all claims, including non-arbitrable ones, when the arbitrable claims are factually intertwined and dominate the case. The court emphasized that resolving the arbitrable claims through arbitration could preclude or simplify the remaining non-arbitrable claims. 

This decision ensures that defendants can address the intertwined allegations in a unified and efficient manner through arbitration. Accordingly, this is another recent decision that is a blow to insurance carriers seeking to litigate fraud claims against medical providers in court versus in arbitration. 

_{Case Law Alerts, 1st Quarter, January 2025 is prepared by Marshall Dennehey to provide information on recent developments of interest to our readers. This publication is not intended to provide legal advice for a specific situation or to create an attorney-client relationship. Copyright © 2024 Marshall Dennehey, all rights reserved. This article may not be reprinted without the express written permission of our firm.}