U.S. Supreme Court Expands Arbitration Clauses for Nursing Homes


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The United States Supreme Court recently rejected a Kentucky State Court-rule that restricted the ability of a Nursing Homes to assert that a case must go to Arbitration when the care agreement was entered into by a ‘Power of Attorney.’  (Click the link to download the entire U.S. Supreme Court decision).

Nursing Home Residents have the Right to feel safe and to have good care.

In the Kindred Nursing Centers case, two nursing home patients had granted broad power-of-attorney powers to their loved ones.  That meant that the family members had the power to enter into contracts, including a nursing care contract.  Among the documents that were presented to the family members, when their loved ones were admitted for nursing care were “Arbitration Agreements.”  Those Arbitration Agreements stated that the family members were waiving the right to a jury trial and agreeing to arbitrate any claims for nursing neglect.  They were doing this on behalf of the loved ones who had granted them the power-of-attorney.

When the family members sued Kindred Nursing Home for the neglect that led to injuries to their loved ones, the nursing home filed motions to dismiss the claims on the basis that the Plaintiffs had waived their right to a jury trial (or any Court action).  Arbitration is an out-of-court hearing where a private citizen (NOT A JUDGE) will sit in judgment of the claims and defenses and decide whether the nursing home was negligent and whether they owe any money to the injured people (or their families, if they have died).  This means that the proceedings happen in secret.  This means that the judgment is not public knowledge.  This means that the Arbitrator is often someone who hears cases that are brought against the same Nursing Home regularly, which means they are being paid by the same Nursing Home on a regular basis–because Arbitration also means that the two sides have to pay fees for the time the Arbitrator works on the case.  (There was an excellent 3-part review of Arbitration Clauses in America done in October, 2015 by the New York Times).  I also wrote about Arbitration in nursing contracts here and here and here.

In the Kindred case, the Courts dismissed the injury claims and sent the parties to Arbitration.  The Plaintiffs appealed up to the Kentucky Supreme Court, where the Court rejected the Arbitration agreements.  That Court held that the powers-of-attorney documents that empowered the relatives to enter into agreements for them did not explicitly grant them the power to waive the right to trial and enter into an Arbitration.  Thus, the person with the power-of-attorney did not have the authority to waive those rights.  That would have returned the parties to lower courts for a trial.  However, the Case was then heard by the U.S. Supreme Court.

The Justices of the Supreme Court determines that the Federal Arbitration Act (“FAA”) did not agree with the Kentucky Supreme Court’s reading of the law.  The FAA was a law that was initially passed by Congress in 1925.  It provides rules that set forth the ability of parties to enter into agreements to arbitrate their disputes outside the Court systems both under Federal and State Law disputes.  In this case, SCOTUS held (in a 7-1 opinion, Justice Gorsuch did not participate in the hearing or opinion) that the FAA did not allow Kentucky law to require special mention of the power to enter into an Arbitration Agreement in order for the Plaintiffs to waive their rights to trial.  Therefore, the cases would be dismissed and the parties must now proceed in Arbitration.

WHAT THIS MEANS TO YOU: When something happens to you or a loved one in a nursing home, you have the right to speak with an attorney about your injuries.  It can be a painful, sad, and frustrating time.  While the primary focus will be (and should be) medical care for the person who is injured, the next concern is likely going to be asking questions about what happened.  Why did this happen?  What do the records show?  Was it neglect?  What options do we have?  Nursing Homes prefer to have claims against them heard by an arbitrator who hears cases of neglect all the time.  They hope it will result in lower awards for damages.  We urge you to read every document that you sign upon entry into a nursing home agreement very carefully.  Do not be afraid to ask questions.  And tell them that you do not want to submit to arbitration if that is your choice.  If they are telling you that you cannot bring your claim in Court, that is when you should speak to us about your case.  We can examine whether the Arbitration Clause is legitimate and discuss your rights and options.

This decision by SCOTUS is going to make it harder for injured people to have their claims heard in open court and fair forums.  But that is yet another reason that you need and deserve an advocate who will listen to and understand your claims and will fight for your rights.

The United States Supreme Court recently rejected a Kentucky State Court-rule that restricted the ability of a Nursing Homes to assert that a case must go to Arbitration when the care agreement was entered into by a ‘Power of Attorney.’  (Click the link to download the entire U.S. Supreme Court decision).

Nursing Home Residents have the Right to feel safe and to have good care.

In the Kindred Nursing Centers case, two nursing home patients had granted broad power-of-attorney powers to their loved ones.  That meant that the family members had the power to enter into contracts, including a nursing care contract.  Among the documents that were presented to the family members, when their loved ones were admitted for nursing care were “Arbitration Agreements.”  Those Arbitration Agreements stated that the family members were waiving the right to a jury trial and agreeing to arbitrate any claims for nursing neglect.  They were doing this on behalf of the loved ones who had granted them the power-of-attorney.

When the family members sued Kindred Nursing Home for the neglect that led to injuries to their loved ones, the nursing home filed motions to dismiss the claims on the basis that the Plaintiffs had waived their right to a jury trial (or any Court action).  Arbitration is an out-of-court hearing where a private citizen (NOT A JUDGE) will sit in judgment of the claims and defenses and decide whether the nursing home was negligent and whether they owe any money to the injured people (or their families, if they have died).  This means that the proceedings happen in secret.  This means that the judgment is not public knowledge.  This means that the Arbitrator is often someone who hears cases that are brought against the same Nursing Home regularly, which means they are being paid by the same Nursing Home on a regular basis–because Arbitration also means that the two sides have to pay fees for the time the Arbitrator works on the case.  (There was an excellent 3-part review of Arbitration Clauses in America done in October, 2015 by the New York Times).  I also wrote about Arbitration in nursing contracts here and here and here.

In the Kindred case, the Courts dismissed the injury claims and sent the parties to Arbitration.  The Plaintiffs appealed up to the Kentucky Supreme Court, where the Court rejected the Arbitration agreements.  That Court held that the powers-of-attorney documents that empowered the relatives to enter into agreements for them did not explicitly grant them the power to waive the right to trial and enter into an Arbitration.  Thus, the person with the power-of-attorney did not have the authority to waive those rights.  That would have returned the parties to lower courts for a trial.  However, the Case was then heard by the U.S. Supreme Court.

The Justices of the Supreme Court determines that the Federal Arbitration Act (“FAA”) did not agree with the Kentucky Supreme Court’s reading of the law.  The FAA was a law that was initially passed by Congress in 1925.  It provides rules that set forth the ability of parties to enter into agreements to arbitrate their disputes outside the Court systems both under Federal and State Law disputes.  In this case, SCOTUS held (in a 7-1 opinion, Justice Gorsuch did not participate in the hearing or opinion) that the FAA did not allow Kentucky law to require special mention of the power to enter into an Arbitration Agreement in order for the Plaintiffs to waive their rights to trial.  Therefore, the cases would be dismissed and the parties must now proceed in Arbitration.

WHAT THIS MEANS TO YOU: When something happens to you or a loved one in a nursing home, you have the right to speak with an attorney about your injuries.  It can be a painful, sad, and frustrating time.  While the primary focus will be (and should be) medical care for the person who is injured, the next concern is likely going to be asking questions about what happened.  Why did this happen?  What do the records show?  Was it neglect?  What options do we have?  Nursing Homes prefer to have claims against them heard by an arbitrator who hears cases of neglect all the time.  They hope it will result in lower awards for damages.  We urge you to read every document that you sign upon entry into a nursing home agreement very carefully.  Do not be afraid to ask questions.  And tell them that you do not want to submit to arbitration if that is your choice.  If they are telling you that you cannot bring your claim in Court, that is when you should speak to us about your case.  We can examine whether the Arbitration Clause is legitimate and discuss your rights and options.

This decision by SCOTUS is going to make it harder for injured people to have their claims heard in open court and fair forums.  But that is yet another reason that you need and deserve an advocate who will listen to and understand your claims and will fight for your rights.

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      Life has many surprises, some of which are not pleasant and many time almost tragic. My 95 year-old Mother and I were involved in a very serious car accident, in which my car was totaled. We were ambulanced to the hospital in serious condition. Life also presents us with many important decisions, which could be life altering. I contacted Jim Coogan…

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      Life has many surprises, some of which are not pleasant and many time almost tragic. My 95 year-old Mother and I were involved in a very serious car accident, in which my car was totaled. We were ambulanced to the hospital in serious condition. Life also presents us with many important decisions, which could be life altering. I contacted Jim Coogan…

      Geraldine
    • Exceptionally Professional

      Life has many surprises, some of which are not pleasant and many time almost tragic. My 95 year-old Mother and I were involved in a very serious car accident, in which my car was totaled. We were ambulanced to the hospital in serious condition. Life also presents us with many important decisions, which could be life altering. I contacted Jim Coogan…

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