Supreme Court revisits nursing home arbitration contract issue

Posted on behalf of Stewart Bell, PLLC on Jun 18, 2012 in Nursing Home Information

Earlier this year, the United States Supreme Court overturned a prior West Virginia Supreme Court ruling in which the state court held that arbitration agreements were unenforceable with respect to personal injury and wrongful death lawsuit s, that Congress never intended the Federal Arbitration Act to apply to such suits, and that state public policy decisions on the issue were not preempted by the federal law either.

As you likely know, that previous case involved arbitration agreements contained in nursing home contracts and three separate plaintiffs whose wrongful death lawsuits alleging nursing home negligence and/or abuse were consolidated and handled as a single case.

In the majority opinion issued Feb. 21, justices said that the West Virginia Supreme Court's "interpretation of the (Federal Arbitration Act) was both incorrect and inconsistent with clear instruction in the precedents of the court," and that the federal law contained no exception for personal injury and wrongful death lawsuits. In effect, this meant that West Virginia's highest court would have to reconsider whether arbitration clauses are unenforceable under state law and preempted by federal law.

On June 6, attorneys for the plaintiffs and defendants party to those lawsuits once again stood before the court and did just that.

According to reports, many of the plaintiff's arguments advanced during the hearing were focused on principles of contract law. On one front, attorneys argued that their clients must have the right to file a lawsuit because the designated arbitrator would not accept their cases -- an impossibility factor that made the arbitration agreement invalid.

Several of the plaintiff's other arguments focused on fairness factors, with their attorneys pointing out that residents had to agree to arbitrate any disputes in order to receive care, did not know what they were giving up, were not informed of their legal rights and had no appreciable legal experience or representation during the contract formation process.

Lastly, the plaintiffs' attorneys also noted the prohibitive $10,000 cost for filing a nursing home negligence claim under the arbitration agreement (as opposed to $250 to file in circuit court) and the fundamental unfairness of depriving residents the right to sue nursing homes in court while not depriving nursing homes of the same right.

We will provide an update here just as soon as the West Virginia Supreme Court reaches a decision in this important nursing home negligence case.

Source: The State Journal, "WV Supreme Court hears nursing home arbitration case," Andrea Lannom, June 6, 2012

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