Caremark LLC v. Choctaw Nation ( 2022 )

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA 8 9 Caremark LLC, et al., No. CV-21-01554-PHX-SMB 10 Petitioners, ORDER 11 v. 12 Choctaw Nation, et al., 13 Respondents. 14 15 Pending before the Court is the Choctaw Nation’s1 Emergency Motion for Stay 16 Pending Appeal and Memorandum of Law in Support (the “Motion”). (Doc. 40.) 17 Caremark2 filed an Opposition to the Motion, (Doc. 44), and the Nation replied, (Doc. 45). 18 The parties did not request oral argument, and the Court declines to hold oral argument, 19 finding it unnecessary. See LRCiv 7.2(f). The Court has considered the briefing and 20 relevant law and will deny the Nation’s Motion. 21 I. BACKGROUND 22 The Court provided a more detailed background in its March 14, 2022 order (the 23 1 The “Choctaw Nation” or “the Nation” means the Choctaw Nation; the Choctaw Nation 24 Health Services Authority; the Choctaw Health Care, Talihina, OK; the Choctaw Nation Health Clinic-Rubin White, Poteau; the Choctaw Nation Health Clinic-McAlester; the 25 Choctaw Nation Health Clinic-Idabel; the Choctaw Nation Health Clinic-Stigler; the 26 Choctaw Nation Health Clinic-Hugo; the Choctaw Nation Health Clinic-Atoka; the Choctaw Nation Health Care Center Durant Pharmacy; and the Choctaw Nation Online 27 Pharmacy Refill Center. 28 2 “Caremark” means Caremark, LLC; Caremark PHC, LLC; CaremarkPCS Health, LLC; Caremark Rx, LLC; Aetna, Inc.; and Aetna Health, Inc. 1 “Order”), (see Doc. 37 at 1–3), and will not reiterate those details here. Rather, the Court 2 incorporates the Order’s background by reference. Relevant here, on April 26, 2021, the 3 Choctaw Nation filed a complaint in the Eastern District of Oklahoma (the “Oklahoma 4 Action”) against eleven defendants, including all the named petitioners in this action. See 5 Choctaw Nation v. Caremark, LLC, No. 6:21-CV-128-PRW (E.D. Okla. 2021). The 6 Nation’s complaint in that case seeks redress under the Recovery Act, 25 U.S.C. § 1621e, 7 which provides tribes with the statutory right to recoup costs of covered medical services 8 provided to tribal members from applicable insurance coverage. (Doc. 16 at 3.) 9 On September 10, 2021, Caremark filed their Petition with this Court moving the 10 Court to compel the Choctaw Nation and related parties to submit their dispute to 11 arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. § 1, et seq. (the “FAA”), and 12 pursuant to agreements entered by the parties. (Doc. 1.) On March 14, 2022, the Court 13 granted Caremark’s Petition to Compel Arbitration. (Doc. 37.) 14 The Choctaw Nation filed this emergency motion on April 12, 2022, requesting a 15 stay of arbitration proceedings pending an appeal of the Order. The Nation argues that a 16 stay is necessary in light of the fact that the arbitration process has already commenced. 17 (Doc. 40 at 3.) Caremark opposes a stay of arbitration. 18 II. LEGAL STANDARD 19 When determining whether to issue a stay pending appeal, a court considers the 20 following factors: 21 (1) whether the stay applicant has made a strong showing that he is likely to 22 succeed on the merits; (2) whether the applicant will be irreparably injured 23 absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest 24 lies. 25 Al Otro Lado v. Wolf, 952 F.3d 999, 1006–07 (9th Cir. 2020) (quoting Nken v. Holder, 556 26 U.S. 418, 426 (2009)). The first two factors are most critical, and the last two are reached 27 only if an applicant satisfies the first two. Id. at 1007 (citing Nken, 556 U.S. at 434). The 28 Ninth Circuit employees a “sliding scale” approach whereby “the required degree of 1 irreparable harm increases as the probability of success decreases.” Sanchez v. Att’y Gen. 2 of Arizona, No. CV-17-00224-TUC-RM, 2021 WL 2105610, at *2 (D. Ariz. Mary 25, 3 2021) (quoting Golden Gate Rest. Ass’n v. City and Cty. of San Francisco, 512 F.3d 1112, 4 1115 (9th Cir. 2008)). 5 III. DISCUSSION 6 The Choctaw Nation argues for a stay using the same failed arguments that it used 7 to oppose Caremark’s Petition to Compel Arbitration. As a result, the Nation fails to show 8 that it is likely to succeed on the merits. Furthermore, the Nation fails to show that it would 9 be irreparably injured absent a stay. Therefore, the Court will deny the Nation’s Motion. 10 A. Likelihood of Success on the Merits 11 The Nation is unlikely to succeed on the merits of its appeal. “An applicant for a 12 stay ‘need not demonstrate that it is more likely than not they will win on the merits,’ but 13 rather must show ‘a reasonable probability’ or ‘fair prospect’ of success.” FTC v. 14 Qualcomm, 935 F.3d 752, 755 (9th Cir. 2019) (quoting Leiva-Perez v. Holder, 640 F.3d 15 962, 966–67 (9th Cir. 2011)). In arguing for its likelihood of success on the merits, the 16 Nation advances no new arguments but, instead, reiterates the arguments it made in 17 opposition to Caremark’s Petition to Compel Arbitration. The Court continues to find the 18 Nation’s arguments unpersuasive for the same reasons it explained in its order compelling 19 arbitration. (See generally Doc. 37.) After review of the parties’ briefing and the Court’s 20 order, the Court stands by its decision. Therefore, the Court finds that the Nation’s appeal 21 does not have a likelihood of success on the merits, nor has it shown a reasonable 22 probability or a fair prospect of success. 23 B. Potential Injury to The Choctaw Nation 24 The Nation argues that it will be irreparably injured without a stay because it will 25 be forced to submit to an arbitration to which it did not agree and because it will result in 26 the loss of sovereign immunity. (Doc. 40 at 7.) Caremark argues that the Nation will not 27 be irreparably injured because the Court already ruled that the Nation waived its sovereign 28 immunity and because the Court can simply refuse to enforce any arbitration award if the 1 Court’s order is overturned on appeal. (Doc. 44 at 16 (citing Alascom, Inc. v. ITT N. Elec. 2 Co., 727 F.2d 1419, 1422 (9th Cir. 1984))). 3 “An application for a stay pending appeal must show that a stay is necessary to 4 avoid likely irreparable injury to the applicant while the appeal is pending.” Al Otro Lado, 5 952 F.3d at 1007 (citing Nken, 556 U.S. at 434). “The minimum threshold showing for a 6 stay pending appeal requires that irreparable injury is likely to occur during the period 7 before the appeal is likely to be decided.” Id. (citing Leiva-Perez, 640 F.3d at 968). “Thus, 8 under the sliding scale approach, a stay applicant’s ‘burden with regard to irreparable harm 9 is higher than it is on the likelihood of success prong, as she must show that an irreparable 10 injury is the more probable or likely outcome.’” Id. (quoting Leiva-Perez, 640 F.3d at 11 968). 12 Here, the Nation has not shown that it will suffer irreparable injury absent a stay. In 13 the Order, the Court found that the tribe waived its sovereign immunity by entering into 14 the Provider Agreements with Caremark, which incorporated by reference the arbitration 15 agreements. (Doc. 37 at 9–10.) Thus, their argument that they will lose sovereign 16 immunity if a stay is not granted is unpersuasive.3 Furthermore, since arbitration awards 17 are not self-executing, if an arbitration award is improper, a court “will not enforce the 18 award.” Alascom, Inc., 727 F.2d at 1422. “Thus, any harm caused by the denial of a stay 19 [of arbitration] will ordinarily be neither serious nor irreparable.” Id.; United Food & Com. 20 Workers Union v. Ralphs Grocery Co., No. CV 19-4265 CBM (EX), 2020 WL 1230639, 21 at *5 (C.D. Cal. Feb. 14, 2020) (finding that respondents would suffer no harm if the 22 arbitration proceeded while the appeal was pending); Adams v. Postmates, Inc., No. 19- 23 3042 SBA, 2020 WL 1066980, at *5 (N.D. Cal. Mar. 5, 2020) (same). Accordingly, the 24 Court finds that the Nation will not suffer irreparable injury if the stay is not granted. 25 26 3 Moreover, it is unclear whether sovereign immunity even applies where the Nation is the 27 plaintiff in the underlying case in Oklahoma. Sovereign immunity is an “immunity from 28 suit.” Burlington N. & Santa Fe Ry. Co. v. Vaughn, 509 F.3d 1085, 1090 (9th Cir. 2007) (emphasis original). IV. CONCLUSION 2 The Court finds that the Choctaw Nation has failed to show a reasonable probability || or a fair prospect of success on appeal. Furthermore, the Nation has failed to show it will be irreparably injured absent a stay. Accordingly, 5 IT IS ORDERED denying the Nation’s Emergency Motion for Stay. (Doc. 40.) 6 Dated this 29th day of April, 20272. 7 8 Le —~ os > fonorable Susan M. Brnovich = 10 United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 4 The Court need not discuss the third and fourth factors of the stay analysis because the 28 || Nation was failed to show that either of the first two factors favor a stay. See Al Otro Lado, 952 F.3d at 1007 (citing Nken, 556 U.S. at 434). _5-