Milliman, Inc. v. James J. Donelon, Commissioner of Insurance for Louisiana, in His Capacity as Rehabilitator of Louisiana Health Cooperative, Inc.
Arbitration Privacy JusticiabilityDoctri
Whether the Federal Arbitration Act (the 'FAA') preempts the state's forum selection clause and requires the commissioner to arbitrate these pre-insolvency damages claims against a non-policyholder, or whether the arbitration of these claims impairs or interferes with the state's regulation of the business of insurance, such that the state's forum selection clause reverse preempts the FAA pursuant to Section 2(b) of the McCarran-Ferguson Act?
QUESTION PRESENTED Milliman, Inc. performed pre-insolvency actuarial services for LAHC, a Louisiana health insurer, pursuant to a consulting agreement that requires the arbitration of any disputes arising out of or relating to that agreement. The Louisiana Insurance Commissioner, acting as rehabilitator of insolvent insurer LAHC, brought contract based damages claims in state court against Milliman. It is undisputed that if LAHC had brought these claims, they would have had to be arbitrated. However, the Louisiana Supreme Court held that the forum selection clause in the state’s insurance insolvency statute permits the Commissioner to bring these claims in state court and to refuse to arbitrate them. The question presented is: Whether the Federal Arbitration Act (the “FAA”) preempts the state’s forum selection clause and requires the commissioner to arbitrate these pre-insolvency damages claims against a non-policyholder, or whether the arbitration of these claims impairs or interferes with the state’s regulation of the business of insurance, such that the state’s forum selection clause reverse preempts the FAA pursuant to Section 2(b) of the McCarran-Ferguson Act? (i)