- The Washington Times - Wednesday, October 16, 2002

The Supreme Court swapped one class-action case for another yesterday, backing out of a dispute over a popular credit-card-rebate program while agreeing to intervene in a case between the managed care industry and doctors.
Eight months after justices said they would consider the credit-card case, they abruptly dismissed it a blow to businesses that wanted the high court to use the dispute between Ford Motor Co. and millions of credit-card holders to open the federal courts to more class-action lawsuits.
Ford had been sued by people who joined a credit-card-rebate program that allowed them to accumulate points to use for car purchases. Ford and Citibank canceled part of the 5-year-old rebate program in 1998.
The question that justices put off for now was whether the lawsuits belonged in federal or state court. Suits had been filed in state courts in Alabama, California, Illinois, New York, Oregon and Washington.
"It's a temporary setback," said Robin Conrad, an attorney for the U.S. Chamber of Commerce, which backed Ford in the case.
Ford and Citibank argued that federal court was the proper jurisdiction because of the amount of money involved in the conflicts. The court had been asked to clarify how the amount should be calculated.
The Supreme Court heard arguments in the case last week on the opening day of its new nine-month term. Justices questioned then whether the case should be reviewed further by lower courts.
The health maintenance organization case puts the justices in the middle of a class-action assertion that health care insurers are cheating doctors. The court will consider whether doctors can sue under a federal racketeering law or whether some disputes must be settled in arbitration.
It's just one issue arising out of a case involving about 600,000 doctors who are jointly suing 15 HMOs in Miami. This case includes two of the HMOs, PacifiCare Health Systems Inc. and UnitedHealthcare Inc., which claim some doctors had signed contracts promising to work out disagreements in arbitration.
Arbitration is favored by many companies as cheaper, faster and more predictable than trials. An outside expert's decision is final.
Mary Davis, a law professor at the University of Kentucky specializing in class actions, said the large lawsuits are receiving more attention from the public and also from the Supreme Court.
"There seems to be an awareness, a sensitivity to the tension in the courts below on how to deal with complex, large-scale cases," Miss Davis said.
Also yesterday, the Supreme Court agreed to consider a case involving a computer expert who moved from California to Las Vegas before collecting millions of dollars in patent fees.
At issue is a ruling that allows Gilbert Hyatt to sue California officials in Nevada court. Mr. Hyatt, who has a patent for a computer microprocessor chip, filed a tax return that said he moved to Nevada in 1991, just before receiving $40 million in patent-licensing fees, California lawyers told the court.
California's tax agency is trying to collect some taxes from Mr. Hyatt. Mr. Hyatt claims the tax officials invaded his privacy and were guilty of fraud in checking his residence status.
Justices will consider whether Nevada courts must follow California's law, which would prevent the lawsuit.
Thirty-five states had asked the Supreme Court to intervene and hear California's case.

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