A party cannot relitigate the arbitrability of its state court wrongful conduct claim by merely restyling the same allegations as a federal RICO claim, according to a New York federal district court.

In Jamaica Hospital Medical Center, Inc. v. United Health Group, Inc., No. 07 CV 506(SJ)(JO), 2008 WL 4701017 (E.D.N.Y. Oct. 22, 2008), Jamaica filed an action in state court against Oxford alleging breach of contract and a "widespread course of rogue conduct" designed to improperly enrich non-party insurer UHG. Asserting an agreement between the parties as a defense, Oxford successfully moved to compel arbitration of Jamaica's claims.

While arbitration in the state action was pending, Jamaica filed a federal suit, alleging jurisdiction under the Racketeer Influenced and Corrupt Organizations Act (RICO), maintaining that Oxford and UHG acted in concert to violate the state laws at issue in its prior state court complaint. Oxford and UHG asked the Court to refrain from asserting jurisdiction over the matter.

The Court observed that the state court had already passed judgment on the claims underlying Jamaica's RICO allegations and found the claims were arbitrable. Therefore, there was no reason to relitigate the arbitrability of the claims in federal court, and res judicata barred the Court from doing so. While the state court claims were not styled as a RICO conspiracy, the Court concluded that their essence was the same – a pattern of wrongdoing that was now national, rather than just statewide, in scope and scale. Because Jamaica was fully aware of the pattern of conduct and events alleged in the federal action at the time the state action was filed, Jamaica was barred from relitigating claims based on those same events.