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U.S. Supreme Court Enforces Nursing Home Arbitration Agreements Signed Under a Power of Attorney


Back in elementary school you probably learned that the Constitution guarantees your right to a jury trial in any civil lawsuit. This is true, but there’s an important caveat: a person can waive their right to a jury trial by agreeing to arbitration. Also called “alternative dispute resolution,” arbitration involves submitting a dispute to a non-judicial arbitrator. Like a judge or jury, the arbitrator listens to evidence and issues a ruling (typically called an “award”) that is legally binding on both sides.

Unfortunately, arbitration does not always offer injured parties the same legal protections as traditional civil litigation. And in many cases, a person may unwittingly agree to arbitration, thereby waiving their constitutional rights. This frequently happens in the context of nursing home admissions: A nursing home will ask a patient or family member to sign a lengthy admission form that includes a binding arbitration agreement.

State Courts Cannot “Single Out” Arbitration Clauses, Even to Protect Victims

But can a person legally sign away someone else’s right to a jury trial? The United States Supreme Court recently answered that question. Specifically, the Court addressed whether someone acting under a power of attorney could agree to binding arbitration on behalf of a nursing home patient.

The underlying case involved two now-deceased residents of a Kentucky nursing home. In each case, a family member held the resident’s power of attorney. Each also signed an admission form on behalf of the resident that included a binding arbitration agreement.

Both agents later sued the nursing home, alleging its “substandard care” caused their respective residents’ deaths. The nursing home moved to enforce the arbitration agreements and dismiss the lawsuits. The Kentucky Supreme Court eventually found the arbitration agreements were invalid, holding that a power of attorney could not authorize someone to deprive a person of their right to a jury trial without express authorization. In other words, unless the power of attorney contained express language permitting the agent to sign an arbitration agreement, no such authorization could be inferred.

The U.S. Supreme Court disagreed. In an 8-1 decision, the nation’s highest court said federal law prevents a state court from “singling out” arbitration contracts for such special treatment. “By requiring an explicit statement before an agent can relinquish her principal’s right to go to court and receive a jury trial,” Justice Elena Kagan said, writing for the majority, “the [Kentucky] court did exactly what this Court has barred: adopt a legal rule hinging on the primary characteristic of an arbitration agreement.”

The lone dissenting vote was Justice Clarence Thomas, who wrote separately to state his view that federal arbitration law “does not apply to proceedings in state courts.”

Do You Suspect A Loved One is a Victim of Nursing Home Abuse?

Even if Justice Thomas’ view had prevailed, that would have been of little comfort to victims of nursing home abuse in Tennessee. Our state’s courts have long enforced arbitration agreements signed under a power of attorney. The Tennessee Supreme Court explicitly said in a 2007 ruling that state law permits agents to sign arbitration agreements on behalf of nursing home residents.

Given how the laws are stacked in favor of arbitration, it is important to speak with a qualified Tennessee nursing home accident attorney right away if you suspect a loved one is being abused. Contact the offices of Fox, Farley, Willis & Burnette, Attorneys at Law, in Clinton or Knoxville today to schedule a consultation.



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