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Kaiser Arbitration May Be Unenforceable, Says Unfair Business Competition Case Finalized Today
3/17/2004 1:11:00 PM 
To: State and City Desk 

Contact: Carmen Balber of Election Watchdog, 310-392-0522, ext. 324;

LOS ANGELES, March 17 /U.S. Newswire/ -- The son of a Kaiser Permanente patient who died under Kaiser's care filed final papers with the court today in a groundbreaking suit which requires Kaiser to disclose to patients that its arbitration provisions may be unenforceable. Kaiser routinely funnels aggrieved patients and survivors into binding arbitration and denies them access to the courtroom. Chant Yedalian's case, brought under the unfair business competition law and finalized today, restricts the ability of the HMO to continue forcing arbitration on patients as a way to limit their liability.
Yedalian went to law school following his mother's death to find a way to prevent others from suffering as his mother did. Now, Kaiser has contributed $100,000 to a ballot initiative which would gut the unfair business competition law, which Yedalian used to force Kaiser's disclosure.

"Kaiser broke California law by forcing patients into secret arbitration proceedings without fully and properly disclosing that they had given up their rights. Today's filing closes the door on the HMO's illegal actions. The unfair business competition law was the only tool I had to hold Kaiser accountable for its deception. With today's resolution of the case, Kaiser should take back the donation it made to the anti- patient initiative and stop its efforts to restrict patients' rights," said Yedalian.
Mandatory arbitration is a private proceeding in which there is no public record or judicial appeal, and arbitrators are often biased in favor of the HMO. Kaiser failed to follow state law requiring the HMO to disclose to enrollees that they were giving up their right to go to court in case of a dispute. Because of this failure, a court found that the HMO's arbitration provision was not enforceable. Yedalian's suit forced Kaiser to disclose to patients considering a medical malpractice claim that they may not be bound to arbitration. After the document filed today is signed by the court, the action will be dismissed and the court will retain jurisdiction over the case to ensure that the settlement is enforced and Kaiser informs patients of their rights.

Yedalian's mother, Zevart, died in 1998 at the age of 53. She died from breast cancer after Kaiser denied her a bone marrow transplant that could have saved her life. His only avenue to ensure that other Kaiser patients are not secretly deprived of their day in court through hidden mandatory arbitration agreements was the state's unfair business competition law. Under the initiative to gut the law, currently circulating for the November ballot, Yedalian's case could never have been brought.

Yedalian joined over 60 public interest groups last week who have asked that Kaiser and other corporate donors withdraw their support of the anti-consumer initiative. (Read their letter at Read the initiative at .
"Kaiser should not be using premium dollars to fight against patient rights and HMO accountability," said Carmen Balber, a consumer advocate with Election Watchdog. "This ballot initiative is an attempt by big business to eliminate responsibility when they mislead, abuse and cheat consumers."
The unfair business competition law was "the only vehicle we had to vindicate the public's constitutional right to trial by jury," said Yedalian.

Insurance, HMO and auto companies are bankrolling the initiative which would eliminate the right of public interest organizations to bring cases on behalf of Californians to prevent injury or harm to the environment, workers, consumers or the public health, instead only allowing cases brought by the government or after the damage has been done. Further, the legislature would never be allowed to amend the law.

The big business initiative is in part a response to successful suits brought by the Foundation for Taxpayer and Consumer Rights and other organizations under the Unfair Business Competition Law against HMOs that put profits before patients and insurance companies that low-balled claims in the wake of the Northridge earthquake.
Election Watchdog is a political action committee sponsored by Consumer Watchdog, a nonprofit public benefit corporation organized in California. Election Watchdog was organized to protect consumers' interests in the ballot initiative process and does not take positions on candidate elections. Consumer Watchdog is the advocacy and campaign affiliate of the Foundation for Taxpayer and Consumer Rights (FTCR). Learn more at