United States Supreme Court Issues Important Ruling for Nursing Home Arbitration Lawsuits

In a recent United States Supreme Court case, the highest court in the nation issued a ruling that has significant consequences for lawsuits involving nursing home abuse and injuries. In Kindred Nursing Centers v. Clark, the Supreme Court concluded that state courts cannot implement laws that single out arbitration agreements in a manner that results in negative treatment.

The facts of the underlying lawsuit are as follows. Two nursing home residents executed a power of attorney for their respective relatives. When each nursing home resident initially moved to the nursing home, the relative executed an arbitration agreement on behalf of the resident. Some time thereafter, each resident passed away, and the relatives each brought a wrongful death lawsuit against the nursing home, alleging that the resident’s death was a result of negligence. In response to the lawsuits, the nursing home moved to enforce the arbitration agreements.

Since the incidents occurred in Kentucky, the lawsuit initially proceeded through the Kentucky state court system and eventually reached the Kentucky Supreme Court. That court concluded that the relatives could not execute the arbitration agreements on behalf of the residents because the residents did not expressly authorize the relatives to enter into the arbitration agreements. The court concluded that the arbitration agreements could not be enforced because an individual must specifically and unequivocally waive his or her right to a jury trial under the Constitution.

The defendant appealed the decision to the U.S. Supreme Court, which granted review of the case. In reversing the Kentucky Supreme Court’s opinion, the Supreme Court determined that the rule requiring a resident to provide a “clear statement” authorizing signature of the arbitration agreement was contrary to the Federal Arbitration Act (FAA). The intent of this federal law is to require parties to arbitration agreements to honor these contracts. It also mandates courts to review arbitration agreements and their enforceability in the same way they would consider any other contract.

Applied to the present case, the Supreme Court concluded that the “clear statement” rule would unfairly affect arbitration agreements in an explicit manner. Relying on a federal preemption argument, that court also noted that the FAA would preempt any state law that specifically disfavors arbitration contracts. Stated another way, the Supreme Court ruled that states cannot create special rules that apply only to arbitration agreements.

In the context of nursing home abuse lawsuits, this new law could mean that residents are required to handle any dispute with the facility through arbitration. This does not mean that an arbitration agreement can be deemed legally unenforceable on other, well-recognized bases, however. Examples of these bases include misrepresentation, duress, lack of capacity, and failure to disclose material terms.

If you or a loved one has suffered abuse at the hands of a nursing home, you may be entitled to compensation. At Therman Law Offices, we have proudly assisted elderly individuals and their relatives with pursuing compensation following a horrifying, inexcusable, and devastating nursing home abuse incident. We offer a free consultation to help you learn about your legal options, so call us now at 773-545-8849 or contact us online to get started.

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