by Lionel M. Schooler, FCIArb
Jackson Walker LLP1

Introduction. In Guardian Flight LLC v. Medical Evaluations of Texas, 140 F.4th 613 (5th Cir. 2025), the United States Court of Appeals for the Fifth Circuit confronted for the first time the scope, applicability and interplay of the Independent Dispute Resolution process (“IDR”), established by the so-called “No Surprises Act (“NSA”), and arbitral processes.

Background. The NSA was enacted to protect patients from surprise bills incurred when receiving emergency services from out-of-network providers. It was designed to achieve this goal by removing patients from potential exposure to liability and, in the process, creating an IDR process for resolving billing disputes between providers and insurers.

A dispute arose regarding billing and related matters, which triggered a claim being filed under the NSA. The claim was submitted to the IDR for resolution. In this case, the IDR process was overseen by an entity identified as “Medical Evaluators of Texas” (“MET”). As prescribed by statute, MET’s role was to fulfil its obligation to serve as a third-party neutral and resolve the determination of the extent to which the service providers were entitled to recover damages.

MET then proceeded to consider a dispute between the service provider and the insurer, and resolved all claims in favor of the insurer.

As the result of this determination, the service provider initiated litigation against the insurers and MET, as the neutral third party.

Issues Presented. The issues confronting the Fifth Circuit were the following:

(a) The impact of incorporating certain provisions of the Federal Arbitration Act (“FAA”) into the NSA, and the corresponding scope of review by courts of such rulings; and

(b) The entitlement of a neutral third party (MET) to arbitral immunity.

Arbitral Immunity Issue. In a companion case, the Fifth Circuit held that there is no private right of action to challenge an IDR award. The Court made that determination after taking into consideration the limiting language of the NSA’s incorporating of the FAA, specifically FAA §10(a). The Court accordingly determined in this case that the only claims cognizable within the NSA boundaries were:

Procuring an award by corruption, fraud or undue means; where there was evident partiality or corruption of the arbitrators; where the arbitrators engaged in misconduct in the conduct of the hearing; and where arbitrators exceeded their powers.

The Court next determined that vacatur was explicitly restricted to the above four criteria, and in particular, noted that the first of the four criteria, the “corruption, fraud, or undue means” clause was the one at issue in this case.

From that starting point, the Court then explained that analyzing the requisite corruption, fraud or undue means is confined to the four corners of the arbitration proceedings. The Court went on to analyze the providers’ claims against the insurers and found them without merit. Indeed, the Court found that such claims were not stated with sufficient particularity to trigger review under the NSA.

Having resolved the issues presented regarding the insurers, the Court next turned to the claim against MET, the arbitrator of the claims. As the Court put it, the providers sued MET to obtain a remedy if the award in question was vacated. MET countered by invoking immunity from suit, characterizing itself as a quasi-judicial entity, functioning in a manner equivalent to that of an arbitrator. The Court agreed with this contention, referring to the U.S. Supreme Court’s explanation in Cleavinger v. Saxner, 474 U.S. 193, 201 (1985), of utilizing a functional approach to immunity law. The Court further pointed out that the consequence of vacating an award under the NSA would be solely that the MET would have to vacate such an award on remand for further arbitration proceedings.

Conclusion. This case highlights the elasticity of arbitral immunity while at the same time focusing properly upon available arbitral remedies.

1 Mr. Schooler is a former member of the Board of the CIArb North America Branch, and the immediate Past Chair of the Texas Chapter.