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When AAA won't act
December 14, 2006 by Ross Runkel at LawMemo

What if the American Arbitration Association refuses to administer a case even though two parties have agreed to arbitrate under AAA rules?

Actually the answer is pretty simple, as discussed in Deeds v. Regence BlueShield of Idaho (Idaho Supreme Court 07/28/2006).

Brooke Deeds had a health care insurance policy with Regence. After Deeds was injured in a car wreck, Regence refused to pay for treatment for her injuries.

Deeds sued. Regence pointed out that the insurance policy included an agreement to arbitrate disputes, which required "arbitration in accordance with the applicable rules of the American Arbitration Association."

Problem: AAA refused to administer the arbitration.

The Idaho Supreme Court pointed out that all this meant was that AAA rules had to be followed. It did not mean that AAA had to administer or conduct the arbitration. Therefore, the court ordered the parties to arbitrate, and the trial court will appoint the arbitrator.

My view: Correct outcome and reasoning.

There was no language in the agreement that said the arbitration had to be conducted by AAA, only that AAA rules had to be followed.

I learned about this case from Florida Arbitration Law . Com: Idaho SC Enforces Arbitration When AAA Refuses: "in accordance with applicable rules of the AAA" Doesn't Require Using the AAA.

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