Court OKs arbitration in nursing home case, despite lack of forum

Arbitration can continue even without the NAF, the court ruled
Arbitration can continue even without the NAF, the court ruled

An Arkansas nursing home may enforce arbitration in a wrongful death suit against it even though the designated forum is no longer available to arbitrate, a federal court ruled on Monday.

The family of a resident who died during his stay at Pine Hills Health and Rehabilitation in Camden, AR, brought a wrongful death case against the facility and its operator. Pine Hills sought to enforce arbitration in the case, since the resident had signed an arbitration agreement upon his admission to the facility in 2010.

The arbitration agreement signed by the resident stated that any dispute should be arbitrated “in accordance with the National Arbitration Forum,” which no longer conducts consumer arbitration. NAF's decision to stop participating in consumer arbitration has raised questions about the enforceability of nursing home arbitration clauses in the past, with many courts ruling in favor of the facilities.

In an opinion filed on Monday the U.S. Court of Appeals for the Eighth Circuit continued the trend, finding that Pine Hill's arbitration clause is still enforceable even without the NAF. The court notes that the resident's son “argues that he is not required to arbitrate his claims because the code has been canceled,” but fails to show “that NAF has canceled the code.”

“The meaning of the term ‘cancel' in this context is a matter of contract interpretation, and the code does not define the term,” writes Judge Diana Murphy in the court's decision. “The fact that NAF has stopped performing consumer arbitration does not prove that the code has been canceled.”

Since the NAF is no longer an available arbitrator, the court may appoint a substitute so that the case can still be arbitrated, Murphy added.

The decision comes during a tumultuous time for arbitration in nursing homes. A recent federal ban on pre-dispute arbitration was blocked by a court's injunction last week, causing disappointment among groups who believe the practice strips residents of their legal rights. Another case arguing the validity of arbitration agreements, this time between a resident's family and a Kindred Healthcare facility in Kentucky, is slated for review by the U.S. Supreme Court next year.