Health Law Daily Wrap Up, HEALTH INFORMATION TECHNOLOGY—E.D. Pa.: Court upholds LabCorp's arbitration clause in class action over data sharing with Google, (Oct 15, 2024)

By Elena Eyber, J.D.

LabCorp's arbitration agreements, both original and modified, were valid and enforceable, requiring patients to resolve their claims through arbitration.

A federal district court in Pennsylvania ruled on a class action lawsuit in which patients accused LabCorp of sharing their sensitive data with Google, violating the Electronic Communications Privacy Act. LabCorp sought to compel individual arbitration under the Federal Arbitration Act, arguing that patients consented to arbitration by agreeing to the company's Terms of Use when registering for its patient portal. The patients admitted they had not read or understood the terms but argued that LabCorp's arbitration provisions were invalid. The court found that LabCorp's arbitration clause was enforceable and the disputes should be resolved through arbitration (Wiggins v. Laboratory Corporation of America Holdings, No. 24-0648 (E.D. Pa. Oct. 11, 2024)).

Authority. The court first examined whether LabCorp's arbitration agreement properly delegated the authority to decide arbitrability issues to an arbitrator. The patients cited a previous case to argue that the arbitration provisions did not clearly delegate such questions, asserting that LabCorp failed to use specific language indicating that arbitration rules were "incorporated by reference." However, the court found that LabCorp's incorporation of the American Arbitration Association rules was sufficient to show a clear intent to delegate arbitrability to an arbitrator. As a result, the court concluded that LabCorp's arbitration provisions were valid in delegating this authority.

Patient agreement. The court then addressed whether the patients had agreed to the arbitration terms at all, as they claimed they did not consent to the User Agreement by merely checking a box during registration. Applying North Carolina contract law, the court analyzed whether the patients’ actions of checking the box and proceeding with the registration constituted valid assent to the terms. The court found that LabCorp had provided adequate notice of the User Agreement and that the patients' affirmative action to check the box met the legal requirements for valid agreement to the arbitration clause.

Modified agreement. Lastly, the court considered whether LabCorp's subsequent modifications to the User Agreement were binding on the patients. LabCorp had implemented changes to the agreement after the patients initially registered, and the patients continued using the patient portal after receiving notice of these modifications. The court ruled that the patients' continued use indicated assent to the Modified Agreement, which also contained an arbitration provision. Therefore, the court upheld both the original and modified arbitration agreements, compelling the patients to resolve their claims through arbitration.

The case is No. 24-0648.

Judge: Beetlestone, W.

Attorneys: Michael J. Casas (Stephan Zouras, LLP) for Michael Wiggins. Adam A. Cooke (Hogan Lovells US LLP) for Laboratory Corp. of America Holdings.

Companies: Laboratory Corp. of America Holdings

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