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BMD Appellate Win Clarifies Waiver of Contractual Right to Arbitrate

Client Alert

Brennan, Manna & Diamond, LLC attorneys David M. Scott, Lucas K. Palmer, and Krista D. Warren prevailed before the United States Court of Appeals for the Sixth Circuit regarding if/when a party waives a contractual right to arbitrate. Borror Property Management, LLC v. Oro Karric North, LLC, No. 20-3146 (the “Decision”).

BMD clients Oro Karric North, LLC and its affiliates (collectively, “Oro”) entered into a property management agreement with Borror Property Management, LLC (“Borror”), in which Borror agreed to manage several apartment properties owned by Oro. The property management agreement stated that, “[i]f either party shall notify the other that any matter is to be determined by arbitration,” the parties would proceed to arbitration unless the matter could be resolved.

Oro came to believe that Borror breached the management agreement, so Oro sent various correspondence and demand letters to Borror prior to filing suit/arbitration (what Judge Readler, author of the Decision, describes as the “legal equivalent of a shot across the bow”). Oro went so far as to threaten litigation. Borror declined to compromise and instead filed suit against Oro in the United States District Court for the Southern District of Ohio. Oro promptly moved to compel arbitration, but the District Court denied, holding that Oro’s pre-suit threat to litigate constituted a waiver of Oro’s contractual right to require arbitration. Oro appealed.

On appeal, Borror argued that the District Court was correct in deeming Oro’s pre-litigation letters to constitute a waiver of its contractual right to arbitrate. But the Sixth Circuit Court of Appeals notes that strong public policy considerations favor arbitration, and “the exchange of letters between parties as a prelude to more formal dispute resolution is a time-honored tradition.” Further noting that Oro almost immediately moved to compel arbitration after the suit was filed, the Sixth Circuit holds that Borror was not prejudiced and sending a pre-suit “posturing” letter does not constitute a waiver.

Takeaway: This significant precedent has already been cited as authoritative in numerous decisions regarding if/when parties waive the right to arbitrate. Knowing how far one may push in negotiations can make the difference between resolution or impasse and help a party control its own destiny in a conflict scenario.

For any litigation or arbitration questions, please contact Litigation Member David Scott at dmscott@bmdllc.com.

New York, Kansas, Massachusetts, and Delaware Become the latest States to Adopt Full Practice Authority for Nurse Practitioners

While the COVID-19 pandemic certainly created many obstacles and hardships, it also created many opportunities to try doing things differently. This can be seen in the instant rise of remote work opportunities, telehealth visits, and virtual meetings. Many States took the challenges of the pandemic and turned them into an opportunity to adjust the regulations governing licensed professionals, including for advanced practice registered nurses (APRNs).

Explosive Growth in Pot of Gold Opportunity for Bank (and Other) Cannabis Lenders Driving Erosion of the Barriers

Our original article on bank lending to the cannabis industry anticipated that the convergence of interest between banks and the cannabis industry would draw more and larger banks to the industry. Banks were awash in liquidity with limited deployment options, while bankable cannabis businesses had rapidly growing needs for more and lower cost credit. Since then, the pot of gold opportunity for banks to lend into the cannabis industry has grown exponentially due to a combination of market constraints on equity causing a dramatic shift to debt and the ever-increasing capital needs of one of the country’s fastest growing industries. At the same time, hurdles to entry of new banks are being systematically cleared as the yellow brick road to the cannabis industry’s access to the financial markets is being paved, brick by brick, by the progressively increasing number and size of banks that are now entering the market.

2021 EEOC Charge Statistics: Retaliation & Impact of Remote Work

The U.S. Equal Employment Opportunity Commission (EEOC) released its detailed information on workplace discrimination charges it received in 2021. Unsurprisingly, for the second year in a row, the total number of charges decreased as COVID-19 either shut down workplaces or disconnected employees from each other. In 2021, the agency received a total of approximately 61,000 workplace discrimination charges - the fewest in 25 years by a wide margin. For reference, the agency received over 67,000 charges in 2020, and averaged almost 90,000 charges per year over the previous 10 years.

Ohio’s Managed Care Overhaul Delayed – New Implementation Timeline

At the direction of Governor Mike DeWine, the Ohio Department of Medicaid (ODM) launched the Medicaid Managed Care Procurement process in 2019. ODM’s stated vision for the procurement was to focus on people and not just the business of managed care. This is the first structural change to Ohio’s managed care system since the Centers for Medicare & Medicaid Services' (CMS) approval of Ohio’s Medicaid program in 2005. Initially, all of the new managed care programs were supposed to be implemented starting on July 1, 2022. However, ODM Director Maureen Corcoran recently confirmed that this date will be pushed back for several managed care-related programs.

Laboratory Specimen Collection Arrangements with Contract Hospitals - OIG Advisory Opinion 22-09

On April 28, 2022, the Department of Health and Human Services, Office of Inspector General (“OIG”) published an Advisory Opinion[1] in which it evaluated a proposed arrangement where a network of clinical laboratories (the “Requestor”) would compensate hospitals (each a “Contract Hospital”) for specimen collection, processing, and handling services (“Collection Services”) for laboratory tests furnished by the Requestor (the “Proposed Arrangement”). The OIG concluded that the Proposed Arrangement would generate prohibited remuneration under the federal Anti-Kickback Statute (“AKS”) if the requisite intent were present. This is due to both the possibility that the proposed per-patient-encounter fee would be used to induce or reward referrals to Requestor and the associated risk of improperly steering patients to Requestor.