Term: 2016
Docket: 16-32
Kindred Nursing Centers v. Clark
- Pro
16-32 KINDRED NURSING CENTERS V. CLARK DECISION BELOW: 478 S.W.3d 306 CERT. GRANTED 10/28/2016 QUESTION PRESENTED: The Federal Arbitration Act (FAA) provides that arbitration agreements "shall be 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 (emphasis added). That provision requires states to "place [] arbitration contracts 'on equal foot-ing with all other contracts."' DIRECTV, Inc. v. Imburgia, 136 S. Ct. 463, 468 (2015) (quoting Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006)). The Supreme Court of Kentucky here refused to enforce the parties' arbitration agreements because it held that the attorneys-in-fact who signed those agreements lacked authority to enter into arbitration agreements-despite broad powers of attorney, including the power to make "contracts"-because those agreements waive a "divine God-given right" to a jury trial. App., infra, 43a. The court concluded that only an express mention of arbitration agreements in the power of attorney permits an attorney- in-fact to bind her principal to an arbitration agreement (Ibid.), even though Kentucky law does not require such an express mention of any other type of contract. The question presented is: Whether the FAA preempts a state-law contract rule that singles out arbitration by requiring a power of attorney to expressly refer to arbitration agreements before the attorney- in-fact can bind her principal to an arbitration agreement. LOWER COURT CASE NUMBER: 2013-SC-000430-I, 2013-SC-000431-I
The case of Kindred Nursing Centers v. Clark revolved around the issue of arbitration agreements in nursing home contracts. The family members of two deceased residents sued Kindred Nursing Centers for substandard care, despite having signed an agreement to arbitrate any disputes when they admitted their relatives into the facility. The Kentucky Supreme Court ruled that a power-of-attorney document did not authorize a representative to enter into an arbitration agreement on behalf of a resident unless it specifically stated so. However, the U.S Supreme Court reversed this decision in 2017 with a 7-1 vote, stating that Kentucky's rule violated the Federal Arbitration Act (FAA). According to Justice Elena Kagan who delivered the opinion for majority, by singling out arbitration agreements and applying more stringent rules than other types of contracts, Kentucky was infringing upon federal law which puts these agreements on equal footing with all other contracts.
In the dissenting opinion for Kindred Nursing Centers v. Clark, Justice Thomas argued that the Federal Arbitration Act (FAA) does not apply to proceedings in state courts. He stated that the FAA, which makes arbitration agreements "valid, irrevocable and enforceable," is based on Congress's power to regulate interstate commerce and maritime transactions - powers that do not extend to contracts or proceedings in state courts. Therefore, he disagreed with the majority's decision overturning a Kentucky Supreme Court ruling which held that an agent acting under a power of attorney could not bind their principal to an arbitration agreement without specifically being granted such authority. In his view, this was a matter of contract interpretation left up to individual states rather than federal law.
