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The arbitration agreement war between nursing home residents and nursing home operators is being put to the supreme test. As in the United States Supreme Court. The United States Supreme Court heard arguments on February 22nd on the legality of arbitration arguments signed by representatives for nursing home residents. The decision by the U.S. Supreme Court may have far reaching implications for the long-term care industry.
The case heard by the United States Supreme Court is Kindred Nursing Centers LP v. Clark. The issue in the case is actually a question of whether the Federal Arbitration Act pre-empts Kentucky contract law. Two nursing home residents died while in the care of their respective nursing homes. When their representatives sued under Kentucky law the nursing homes tried to compel them to arbitrate. The Kentucky State Supreme Court rejected the arbitration agreements signed by representatives for the deceased nursing home residents. The State Supreme Court decided that the authority that the residents provided to their representatives did not especially allow them to enter into arbitration agreements.
The aftermath of this ruling was what we have come to expect in the arbitration wars. The usual suspects divided into two warring camps.
In one camp are the groups representing long-term care providers who say the state supreme court’s decision “poses a substantial threat to the long-term care industry at a time when demographic trends dictate that provision of long-term care could become increasingly important.” The groups said the Federal Arbitration Act (FAA) and a federal policy favoring arbitration preempt the Kentucky law and similar laws in other states.
In the other camp are public advocacy groups and representatives for the elderly who argue that a right to a jury trial is a fundamental right under the Constitution and shouldn’t be denied to a nursing home resident because her representative signed an optional arbitration agreement without the explicit authority to do so.
The U.S. Supreme Court is the final arbitrator on many issues. Will it be the final arbitrator on nursing home arbitration agreements?