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Ninth Circuit: ERISA Plan Must Arbitrate Dispute Against Its Claims Administrator

In Board of Trustees of The IBEW Local No. 640 And Arizona Chapter NECA Health and Welfare Trust Fund v. Cigna Health and Life Insurance Company, No. 21-16424, 2022 WL 2805111 (9th Cir. July 18, 2022), a short unpublished opinion, the Ninth Circuit affirmed the district court’s order compelling arbitration in a lawsuit brought by The Board of Trustees (“Board”) of the IBEW Local No. 640 and Arizona Chapter NECA Health and Welfare Trust Fund (“Fund”) against Cigna Health and Life Insurance Company for allegedly concocting a scheme to secretly obtain more compensation than it was entitled to and charging excessive fees to the Plan. The court found that the district court correctly determined that the ERISA plan at issue is equitably bound by the Fund’s agreement to arbitrate under the principle of direct benefits estoppel. The court explained that under Arizona law, a nonsignatory to an agreement containing an arbitration provision may be compelled to arbitrate if the nonsignatory “asserts claims that must be determined by reference to the agreement.” Determining what Cigna was entitled to requires interpreting the Administrative Services Only (“ASO”) Agreement. The arbitration provision in the ASO encompasses the parties’ dispute.

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