Submitted: October 15, 2019
from United States District Court for the Southern District
of Iowa - Des Moines
LOKEN, SHEPHERD, and STRAS, Circuit Judges.
SHEPHERD, CIRCUIT JUDGE
case returns to us after remand to the district court to
consider whether a contractual basis for class arbitration
exists in the agreements between the parties. Catamaran
Corp. v. Towncrest Pharmacy, 864 F.3d 966 (8th Cir.
2017) (Catamaran I). On remand, the district
court granted Catamaran Corporation's motion
for summary judgment, finding there was no such contractual
basis in the agreements. Towncrest Pharmacy, Clark's
Pharmacy, Meyer's Healthmart Pharmacy, and Osterhaus
Pharmacy (collectively, the pharmacies) appeal. Having
jurisdiction under 28 U.S.C. § 1291, we now affirm.
facts of this case are extensively detailed in Catamaran
I. As relevant to this appeal, Catamaran is a pharmacy
benefit manager. It contracts with entities that sponsor,
administer, or otherwise participate in prescription drug
benefit plans. Among other services, Catamaran reimburses
pharmacies that furnish prescription drugs to plan members.
At issue are two agreements for such reimbursements between
the pharmacies and Catamaran's predecessors-in-interest,
SXC Health Solutions Corp. and Catalyst Health Solutions,
Inc. The pharmacies entered into these agreements through a
pharmacy services administration organization, AccessHealth,
of which the pharmacies are members. AccessHealth acted as
attorney-in-fact for the pharmacies and signed the agreements
on their behalf. Both agreements contain arbitration
provisions. The SXC Agreement provides that after informal
discussions fail, "either party may submit the dispute
to binding arbitration in accordance with the Rules for the
Conduct of Arbitration of the American Arbitration
Association [AAA] . . . ." Similarly, the Catalyst
Agreement provides "[a]ny controversy or claim arising
out of or relating to this Agreement shall be settled by
arbitration in accordance with the applicable rules of the
[AAA]." As we noted in Catamaran I,
"[n]either agreement uses the word 'class' or
refers to class arbitration." 864 F.3d at 969.
dispute between the parties arose, the pharmacies filed a
demand for class arbitration with the AAA. Catamaran
initiated an action in the district court seeking to prevent
the pharmacies from pursuing class arbitration. Catamaran
then moved for summary judgment and the district court denied
the motion, finding that the agreements committed the class
arbitration question to an arbitrator. On appeal, this Court
reversed, holding that the question of whether the agreements
provide for class arbitration is a substantive question of
arbitrability, and thus presumptively a question for the
court to decide, and the agreements did not otherwise commit
the question to an arbitrator. We remanded the case to the
district court to determine "whether such a
'contractual basis' for class arbitration exists in
the agreements between Catamaran and the pharmacies."
Id. at 973-74. On remand, the district court found
that there was no such contractual basis. The district court
thus granted Catamaran's motion for summary judgment and
entered the requested declaratory judgment prohibiting class
arbitration. The pharmacies now appeal.
pharmacies argue the district court erred because the
agreements establish a contractual basis for class
arbitration. We review de novo a district court's order
granting summary judgment. Lamoureux v. MPSC, Inc.,
849 F.3d 737, 739 (8th Cir. 2017). Under the Federal
Arbitration Act (FAA), 9 U.S.C. § 1 et. seq., a
party may "petition a United States district court for
an order directing that arbitration proceed in the manner
provided for in such agreement" because the
"primary purpose of the FAA is to ensure that private
agreements to arbitrate are enforced according to their
terms." Stolt-Nielsen S.A. v. AnimalFeeds Int'l
Corp., 559 U.S. 662, 682 (2010) (internal quotation
marks omitted). "In this endeavor, as with any other
contract, the parties' intentions control."
Id. (internal quotation marks omitted). As such, the
Supreme Court in Stolt-Nielsen held that "a
party may not be compelled under the FAA to submit to class
arbitration unless there is a contractual basis for
concluding that the party agreed to do so."
Id. at 684. Further, the Supreme Court recently
reaffirmed and clarified the contractual basis standard in
Lamps Plus, Inc. v. Varela in which the Court held
that an ambiguous agreement cannot provide the necessary
contractual basis to conclude that the parties agreed to
class arbitration. 139 S.Ct. 1407, 1416-17 (2019)
("Neither silence nor ambiguity provides a sufficient
basis for concluding that parties to an arbitration agreement
agreed to undermine the central benefits of arbitration
itself."). Accordingly, we must determine whether there
is an affirmative contractual basis to conclude that the
parties agreed to class arbitration. See id.
pharmacies concede, the agreements do not explicitly
authorize class arbitration or even reference it at all.
Other circuits have determined that such "[s]ilence
regarding class arbitration generally indicates a prohibition
. . . ." Quilloin v. Tenet HealthSystem Phila.,
Inc., 673 F.3d 221, 232 (3d Cir. 2012); see also
Opalinski v. Robert Half Int'l Inc., 677 Fed.Appx.
738, 741 (3d Cir. 2017) (collecting cases). Indeed, this
Court has affirmed a denial of a request to arbitrate as a
class, based on arbitration clauses in partnership
agreements, because "the goal of the FAA is to enforce
the agreement of the parties" and "the partnership
agreements ma[de] no provision for arbitration as a
class." Dominium Austin Partners, L.L.C. v.
Emerson, 248 F.3d 720, 728 (8th Cir. 2001). The
rationale behind this interpretation of silence is that there
are fundamental differences between individual and class
arbitration, including that in a class arbitration
proceeding: (1) the benefits of arbitration are
"substantially lessened"; (2) the presumption of
confidentiality and privacy "is lost or becomes more
difficult"; (3) the commercial stakes are much higher
with limited judicial review; and (4) due process concerns
arise because it adjudicates the rights of absent parties.
Catamaran I, 864 F.3d at 971-72 (citing
Stolt-Nielsen, 559 U.S. at 685-87). These
fundamental differences dictate against "presum[ing] . .
. that the parties' mere silence on the issue of
class-action arbitration constitutes consent to resolve their
disputes in class proceedings." Stolt-Nielsen,
559 U.S. at 687.
pharmacies attempt to undermine the significance of the
agreements' silence regarding class arbitration by
minimizing the differences between individual and class
arbitration in this case. For instance, the pharmacies argue
that the benefits of arbitration would not be lost in class
arbitration because the underlying dispute revolves around a
single agreement and involves issues that equally affect all
of the pharmacies. But their arguments miss the mark. As the
district court noted, the fact that the pharmacies have the
same claims against Catamaran based on the same agreement
demonstrates only why the pharmacies now want to proceed with
class arbitration in the underlying dispute. It does not
establish that there is a contractual basis for class
arbitration. Thus, just as we found that, in light of the
fundamental differences between individual and class
arbitration, silence was "insufficient grounds for
delegating the [class arbitration] issue to an
arbitrator" in Catamaran I, so too do we find
silence does not provide a sufficient basis for concluding
that the parties agreed to class arbitration. 864 F.3d at
973; see also Stolt-Nielsen, 559 U.S. at 687.
the pharmacies assert that the agreements' silence on the
issue of class arbitration does not end the inquiry under the
contractual basis standard. Relying on specific language in
Stolt-Nielsen, the pharmacies contend that the
Supreme Court has recognized that authorization of class
arbitration may be implicit in some cases, and the agreements
here reflect such implicit authorization. Specifically, the
Supreme Court noted that "[i]n certain contexts, it is
appropriate to presume that parties that enter into an
arbitration agreement implicitly authorize the arbitrator to
adopt such procedures as are necessary to give effect to the
parties' agreement." Stolt-Nielsen, 559
U.S. at 684-85. However, the Court also noted that
authorization of class arbitration is not to be
"infer[red] solely from the fact of the parties'
agreement to arbitrate." Id. at 685. Thus, the
pharmacies must point to more than the arbitration provisions
alone to support a finding that the parties implicitly
authorized class arbitration.
pharmacies offer several textual arguments in support of
their claim that the parties implicitly authorized the
pharmacies to proceed as a class in the event of a dispute.
Specifically, they cite the fact that one attorney-in-fact
brokered and signed the two agreements on behalf of all of
the pharmacies, that the arbitration provisions are broad in
scope, and that the agreements refer to the pharmacies as a
single entity. However, the pharmacies have not presented any
relevant authority for the proposition that such facts
support a finding of implicit authorization of class
arbitration. The pharmacies offer only Illinois state court
decisions for the general principle that the court will find
an implied term when it "was so clearly in contemplation
of the parties as that they deemed unnecessary to express it
. . . or that it is necessary to imply such a covenant in
order to give effect to and effectuate the purpose of the
contract as a whole." Goldblatt Bros. Inc. v.
Addison Green Meadows, Inc., 290 N.E.2d 715, 719
(Ill.App.Ct. 1972) (quoting Fox v. Fox Valley Trotting
Club, Inc., 123 N.E.2d 595, 598 (Ill.App.Ct. 1954),
rev'd on other grounds, 134 N.E.2d 806 (Ill.
1956)). We conclude the agreements are not inconsistent with
individual arbitration and do not support the ...