On October 28, the Supreme Court granted a cert petition in a case in which the Kentucky Supreme Court refused to enforce arbitration agreements in nursing home agreements. (Kentucky recently topped my list of states hostile to arbitration precisely because of the language in the decision that will be reviewed…)
In Kindred Nursing Centers Limited Partnership v. Clark, three wrongful death cases were consolidated. In each of them, someone with power of attorney for the decedent had signed admission documents that included an arbitration clause. However, Kentucky requires that a power-of-attorney document specifically authorize the agent to waive a jury or court trial in order to validly form an arbitration agreement, and these three POAs did not have that language. The Kentucky court refused to infer the agent’s “authority to waive his principal’s constitutional right to access the courts and to trial by jury” unless that power is “unambiguously expressed” in the power-of -attorney document.
In its application to SCOTUS, the nursing homes engaged experienced Supreme Court practitioners and framed the question presented as: “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.”
I am always happy when SCOTUS takes a new arbitration case, because it usually provides further evidence of the need for my continued existence as an arbitration blogger, advocate, and specialist. However, this grant strikes me as a bit odd. Why wouldn’t SCOTUS just grant, vacate, and reverse (GVR) this case? It had all the hallmarks of a case ripe for GVR? It also doesn’t make sense for SCOTUS to use this as a vehicle to address the many state court decisions refusing to uphold arbitration agreements in nursing home contracts, since in just one month, the federal government will start prohibiting the use of arbitration agreements in nursing home admission documents. In that sense, this type of case is almost moot. Nor does it make sense to me to clarify the preemption doctrine of Concepcion, when the Court just had that opportunity 11 months ago in DIRECTV.
One possible explanation is that SCOTUS wants to define which formation issues are appropriate for courts to tackle on motions to compel arbitration. Indeed, in a cert petition in another arbitration case that was also conferenced on Friday, the petitioner alleged that state courts are (falsely?) labeling many disputes as ones of contract formation in order to keep them in the courts.
As long as we’re talking about the SCOTUS docket, it always surprises me which cases are and are not appealed to the highest court in the land. For example, that Finn case from New Hampshire’s high court that left me speechless in June, because it held that Sections 9-11 of the FAA do not apply in state court? Apparently the party whose arbitration award got vacated did not petition for cert. (Though that party probably made the right call, as earlier this month SCOTUS denied cert in a case asking whether the FAA’s judicial review standards apply in state court.) Same thing seems true of the for-profit college case in which the NJ Supreme Court refused to enforce a delegation clause (no cert petition). But, the new circuit split over whether putting class action waivers in employment arbitration agreements violates the NRLA is already a subject of multiple cert petitions (this, and this and this ). That issue seems like a strong contender for getting a petition granted.