The Supreme Court and President Trump Agree -- Nursing Homes Plaintiffs May Be Required to Arbitrate
A provision in a contract providing for care of a resident in a nursing home may require the parties to arbitrate any dispute over injuries suffered by the resident at the nursing home. In Kindred Nursing Centers Ltd. P'ship v. Clark, 137 S. Ct. 1421 (2017), the Supreme Court ended any doubts as to the enforceability of arbitration clauses in these contracts.
The relevant section of the Federal Arbitration Act (FAA) provides:
"A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid irrevocable and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." (emphasis added).
Various state courts sought to render arbitration clauses unenforceable on state law grounds. The United States Supreme Court made it absolutely clear that state courts may not render arbitration provisions unenforceable by asserting that the provision requiring arbitration is unenforceable under state law.
For example, in Atalese v. U.S. Legal Servs. Group, 99 A.3d 306 (N.J. 2014), the New Jersey Supreme Court found an arbitration clause invalid because, by construing the arbitration clause as a waiver of the right to trial by jury, and holding clear and unambiguous language is needed to waive the right to trial by jury. Similarly, arguing that the clause is unenforceable under a state constitution or as lacking mutuality or any other basic contract defense is not allowed. Alltel Corp. v. Rosenow, 2014 Ark. 375, 2014 WL 4656609 (Ark. 2014) (finding the clause invalid for lack of mutuality).
In Kindred Nursing Centers Ltd. P'ship v. Clark, the Supreme Court's decision was unequivocal on this subject.
"The FAA makes arbitration agreements "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. That statutory provision establishes an equal-treatment principle: A court may invalidate an arbitration agreement based on "generally applicable contract defenses" like fraud or unconscionability, but not on legal rules that "apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue." AT & T Mobility LLC v....
