Commercial Litigation and Arbitration

Plain Language Trumps Interpretative Conventions — “Confronted with … Paeans to the Precepts of Statutory Construction … We Are Reminded That Even ‘[T]he Devil Can Cite Scripture for His Purpose’” — RICO/ Hobbs Act — (Good Quote)

Ambulance Ass’n of Pa. v. Highmark, Inc., 2012 U.S. App. LEXIS 1648 (3d Cir. Jan 23, 2012):

The parties place a single, dispositive issue before us: whether Act 68 requires direct payment to non-participating providers. The Association brings to bear several canons of statutory construction to support its view that Act 68 does, in fact, mandate direct payment. Confronted with the Association's paeans to the precepts of statutory construction, however, we are reminded that even "[t]he devil can cite scripture for his purpose." William Shakespeare, The Merchant of Venice, act 1, sc. 3. After sifting through its many arguments, we find that the Association cannot justify why we should ignore the plain language of a statute — which does not mention direct payment — in favor of a reading that eviscerates the legislature's intent to encourage contracts. For the four reasons that follow, we hold that Act 68 does not require direct payment and, as a result, no violation of the Hobbs Act occurred. Accordingly, we will affirm the District Court's dismissal of the Association's suit for failure to state a claim. ***

In its Amended Complaint, the Association ... alleges that Highmark and other Plans have "engaged in a pattern of attempted and actual extortion, by purposefully ignoring and/or misconstruing" Act 68, and by using the "threat of sending the providers' money to enrollees as a means to exert economic pressure and coerce" non-participating providers to enter into contracts with Plans at unfair rates. App. 00013. This activity, the Association contends, violates the Hobbs Act, 18 U.S.C. § 1962(c) and (d), which makes it "unlawful . . . to conduct [business] affairs through a pattern of racketeering activity." Accordingly, the Association brought suit under the federal civil RICO statute, 18 U.S.C. § 1964(c), for damages sustained due to the alleged Hobbs Act violations.

The Hobbs Act is violated, however, only if Highmark has coerced providers to forfeit a statutory right to direct payment. Without such a right, there is no violation of Act 68, and thus, no violations of the Hobbs Act that might support a viable RICO claim. Indeed, Appellants conceded that our conclusion that Highmark's payment scheme violates Act 68 "is a necessary element of the RICO claims . . . [which] rest on violations of the Hobbs Act as the necessary predicate acts." App. 00025. In light of this concession, our unqualified rejection of the Association's Act 68 contentions necessarily means that no violation of those federal statutes took place here.

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