Opinion
Page 1012a
133 Cal.App.4th 1012a __ Cal.Rptr.3d__ EUNICE VIOLA et al., Plaintiffs and Appellants, v. STATE OF CALIFORNIA DEPARTMENT OF MANAGED HEALTH CARE et al., Defendants and Respondents. B174455 California Court of Appeal, Second District, Fourth Division November 4, 2005Los Angeles County Super. Ct. No. BC306599
ORDER MODIFYING OPINION AND DENYING REHEARING, NO CHANGE IN JUDGMENT
THE COURT
It is ordered that the opinion filed on October 11, 2005 (133 Cal.App.4th 299; __ Cal.Rptr.3d __), be modified in the following particulars:
1. On page 2, the first full paragraph [133 Cal.App.4th 304, advance report, 2d par.] is deleted and the following paragraph is inserted in its place:
The issue in this case is whether the California Department of Managed Health Care (Department) may approve health care service plans in which the only method for resolution of disputes is mandatory arbitration. Plaintiffs contend the Department may not approve such a plan and sought judicial intervention to prevent it from doing so. We conclude that plaintiffs are not entitled to the relief they seek because the Legislature has authorized arbitration of disputes under health care service plans and the governing statutory scheme does not authorize the Department to reject contracts that require that form of dispute resolution. We shall affirm the order of the trial court denying relief.
2. The last sentence commencing at the bottom of page 7 with “Plaintiffs’ theory is” and ending at the top of page 8 [133 Cal.App.4th 309, advance report, last par.] with “resolved by binding arbitration” is modified to read:
Their reasoning runs: (1) sections 1341.9 and 1352.1 of the Knox-Keene Act grant the defendants all powers and duties relating to health care service plans, including the power to approve plan contracts; (2) under section 1352.1, plans with “untrue, misleading, deceptive” language or other language that does not comply with the Act may not be approved; (3) the Department therefore may not approve a plan that contains an unconstitutional provision; (4) plaintiffs have a constitutional right to jury trial; (5) health care service plans between an employer and an insurer containing a mandatory binding arbitration clause effect an unconstitutional waiver of the employees’ right to jury trial; (6) therefore, the Department should require
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that plans offer a choice of jury trial or mandatory binding arbitration; and (7) the Department’s approval of the plans the plaintiffs were offered was improper and subject to challenge by the plaintiffs.
Plaintiffs also invoke Insurance Code section 10291. But, “‘[h]ealth care service plans under the Knox-Keene Act are generally subject to the jurisdiction of the Commissioner of Corporations (§ 1341) [now Director of the Department of Managed Health Care], not the Insurance Commissioner. Thus, Insurance Code section 740, subdivision (g), exempts health care service plans from Department of Insurance jurisdiction (though the Commissioner of Corporations is to consult with the Insurance Commissioner to ensure consistency of regulations to the extent practicable under section 1342.5). Regulations concerning health care service plans are found in title 10 of the California Code of Regulations, section 1300.43 et seq.’ (Williams v. California Physicians’ Service (1999) 72 Cal.App.4th 722, 729 [85 Cal.Rptr.2d 497], fn. omitted.)” (Smith v. PacifiCare Behavioral Health of Cal., Inc., supra, 93 Cal.App.4th at p. 150, fn. 13.)
3. On page 9, the second sentence of the first full paragraph [133 Cal.App.4th 310, advance report, 2d par.] is modified to read:
We find no authority in the federal or state constitutions to support this claim in the context of a group plan offered by an employer.
The petition for rehearing is denied.
There is no change in the judgment.