A split three-judge panel of the U.S. Court of Appeals for the Fifth Circuit ruled that a federal district court should decide whether Aramark can proceed with its lawsuit against Aetna or must resolve the dispute through arbitration. According to the court’s ruling, the arbitration clause is sufficiently ambiguous to be subject to court review.
Aetna, a subsidiary of CVS Health, has been Aramark’s third-party administrator for its self-insured health plans for the past eight years. In 2ƒ023, Aramark sued Aetna in a Texas federal district court, accusing Aetna of violating its fiduciary duties under the Employee Retirement Income Security Act (ERISA) by paying too many improper claims and providing Aetna with misleading information.
The contract requires Aramark to use binding arbitration in Hartford, Connecticut, to resolve disputes with Aetna, except for disputes involving “temporary, preliminary, or permanent injunctive relief or any other form of equitable relief.” Two of the three Fifth Circuit judges held that a court, not an arbitrator, should decide whether the contract requires the parties to arbitrate the dispute at issue, given the ambiguity of the arbitration clause. The third member of the panel agreed that the arbitration clause was ambiguous enough to compel arbitration but indicated disagreement in a dissenting opinion about Aramark’s ability to seek monetary damages through a claim for equitable relief.
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