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Supreme Court of the United States - 137 S. Ct. 1421
Tags: Civil Procedure, Arbitration
tl;dr:
This case determines that the FAA preempts state laws that bar forced arbitration agreements.Video Summary
Case Summary
In the 2017 case of Kindred Nursing Centers LP v. Clark, the US Supreme Court overturned a Kentucky Supreme Court decision that invalidated two arbitration agreements signed by relatives on behalf of nursing home residents. The case involved a dispute between Kindred Nursing Centers LP and the estates of two deceased residents, Joe Wellner and Olive Clark. The representatives of these estates, Beverly Wellner and Janis Clark, sued Kindred for negligence and wrongful death. Kindred sought to compel arbitration based on agreements signed by Beverly and Janis when Joe and Olive entered the nursing home.
The Kentucky Supreme Court found the agreements unenforceable, arguing that they violated the state's constitutional protection of the right to access the courts and trial by jury. The court ruled that these rights could only be waived if the power of attorney explicitly allowed it.
This case is significant because it reinforces the superiority of the Federal Arbitration Act (FAA) over state laws that discriminate against arbitration agreements. The US Supreme Court held that Kentucky's clear-statement rule violated the FAA, as it specifically targeted arbitration agreements. They noted that the FAA requires courts to treat arbitration agreements like any other contract and enforce them based on their terms, except in cases where there are grounds for revocation. The Court dismissed the argument that the clear-statement rule was necessary to protect essential rights to accessing the courts and trial by jury, stating that these rights can be waived implicitly in any contract and that arbitration is a matter of consent, not coercion.
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The Kentucky Supreme Court's clear-statement rule that a general power of attorney does not allow a legal representative to enter into an arbitration agreement for someone else without explicit authorization violates the Federal Arbitration Act. The case involves Kindred Nursing Centers L.P. and two individuals who signed arbitration agreements on behalf of their family members as part of the paperwork required for them to move into a Kindred nursing home. The Kentucky Supreme Court upheld the lower court's decision that the arbitration agreements were invalid, but Justice Abramson dissented, arguing that the clear-statement rule unfairly targeted arbitration agreements and violated the FAA. The Supreme Court of the United States granted certiorari to review the case.
Justice Thomas disagrees with the majority opinion and argues that the Federal Arbitration Act (FAA) does not apply to state court proceedings. He believes that in state court proceedings, the FAA does not supersede the need for explicit authorization from a principal before an agent can waive the principal's right to a jury trial. Justice Thomas cites previous cases where he has expressed the same view. Consequently, he would uphold the decision of the Kentucky Supreme Court.
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