Real Estate News
--> Kentucky News
SCOTUS Reverses KY Nursing Home Arbitration Decision; Refuses To Prioritize Right To Jury Trial
The Kentucky decision can be summarized easily. The case involved nursing homes attempting to compel arbitration of wrongful death and personal injury claims by estates of deceased residents. In each case, a relative with power of attorney had signed an ...
Just as I predicted, SCOTUS reversed the Kentucky Supreme Court’s decision in Kindred this morning. The interesting piece, though, is that the seven member majority went out of its way to cut off some of the “on trend” methods that state courts have been using to avoid arbitration clauses.
The Kentucky decision can be summarized easily. The case involved nursing homes attempting to compel arbitration of wrongful death and personal injury claims by estates of deceased residents. In each case, a relative with power of attorney had signed an admission document that included arbitration when the resident entered the nursing home. However, the Kentucky court refused to infer the agent’s “authority to waive his principal’s constitutional right to access the courts and to trial by jury” unless that power is “unambiguously expressed” in the power-of -attorney document. (You may recall this is the decision that analogized entering into an arbitration agreement to: putting a child up for adoption, aborting a pregnancy, and entering into personal servitude. If that doesn’t cry out “judicial hostility to arbitration,” I don’t know what does.)
Justice Kagan, writing for the seven-member majority, found Kentucky’s “clear statement rule” preempted by the Federal Arbitration Act. “[T]he court did exactly what Concepcion barred: adopt a legal rule hinging on the primary characteristic of an arbitration agreement–namely, a waiver of the right to go to court and receive a jury trial.” In response to Kentucky’s attempt to paint its rule as broader than arbitration, the Court said “No Kentucky court, so far as we know, has ever before demanded that a power of attorney explicitly confer authority to enter into contracts implicating constitutional guarantees.”
That preemption aspect of the decision seems to confirm what I have been saying about the impact of DirecTV: states are in much better position to defend their anti-arbitration “general contract rule” if they can point to at least one non-arbitration circumstance in which it has been applied. (The decision added a footnote to clarify this isn’t an absolute necessity: “We do not suggest that a state court is precluded from announcing a new, generally applicable rule of law in an arbitration case.” But that’s like saying it is conceivable that your mother will appreciate a new vacuum for mothers day, but we don’t recommend it.)
The Court’s decision to clearly state that courts cannot invalidate arbitration agreements based on their (necessary) waiver of the right to a jury trial also cuts off a trendy argument in state courts. New Jersey courts, for example, have invalidated arbitration agreements in recent years based on their failure to clearly advise consumers they are waiving their rights to jury trials (SCOTUS denied cert in the key NJ case, Atalese.) Those NJ decisions are now shaky precedent, IMHO.
The decision then went beyond the basic preemption analysis. Respondents had argued the FAA had no application to contract formation, that only state law controlled that question. SCOTUS quickly disabused the respondents, and all state courts, of that notion, reasoning that the purpose of the FAA would be completely undercut by the rule: “If the respondents were right, States could just as easily declare everyone incompetent to sign arbitration agreements. (That rule too would address only formation.)” In doing so, the Court cut off another avenue for avoiding the FAA. (In my view, though, the slippery slope argument relied on by SCOTUS also cuts against the formation/validity distinction used to separate which issues are decided in court and which by arbitrators.)
[As usual, Justice Thomas dissented based on his position that the FAA does not apply in state courts.]
SCOTUS Accepts Review of Kentucky Nursing Home Arbitration Case
Latest PostsSCOTUS Reverses KY Nursing Home Arbitration Decision; Refuses To Prioritize Right To Jury Trial
Maryland’s Highest Court Finds Small Claims Court Action Waived Right To Arbitrate
Fifth Circuit Dances On Head of Arbitration Pin
8th Circuit Finds ADEA Does Not Preclude Arbitration
See more »
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
Trending Kentucky News:
Andy McDonald: Kentucky’s emerging solar industry threatened by HB 227’s ending of net metering
Trump gives America's 'poorest white town' hope
Gov. Bevin Appoints Daniel Zalla as Circuit Judge for Kentucky’s 17th Judicial Circuit, Division 2
Beauty in the Bluegrass State: $8M Mansion Is Kentucky's Most Expensive Home
Take a tour of the Drumanard estate before it sells (PHOTOS)
Real estate can create possibilities in the community, agents say
Bellevue, KY Homes For Sale & Real Estate
Pets Need Pals – Baby Girl – Kentucky S.A.V.E.
Huge Louisville apartment complex sells as part of $74 million portfolio deal
Former Kentucky pastor picking up pieces of Texas church
Relentless smoke spreads fear at edge of southern wildfires
This Central Kentucky restaurant and bar will focus on locally grown ingredients
Drug overdose deaths reach record high in Kentucky. 1,404 dead in 2016.
Snowy, cold day makes for slick conditions on Ky. roads
EXCLUSIVE: To deal with talent shortage, staffing firm launches commercial real estate practice
Nursing homes operated by Plano company file for bankruptcy after multi-million dollar lawsuits
Former U of L economist Coomes selected new state Health Policy executive director
Strong sales, increasing home values, continued to drive the Kentucky real estate market in January
Flash floods take toll on Northern Kentucky area
Kentucky Derby a huge success for Vegas sportsbooks