SCOTUS grants provider win in arbitration clause dispute

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Justice Elena Kagan delivered the Supreme Court’s opinion in May.
Justice Elena Kagan delivered the Supreme Court’s opinion in May.

The U.S. Supreme Court in May sided with a Kentucky nursing home in a case involving power of attorney and arbitration that could have wider implications for the profession.

Kindred Nursing Ctrs. LP v. Clark consolidated wrongful death complaints against a Kindred-operated facility in which representatives with power of attorney for residents signed arbitration agreements. Kentucky's highest court ruled in 2012 that the agreements were not binding since the people with power of attorney were not specifically allowed to sign such documents.

The case drummed up support from long-term care provider groups, including the American Health Care Association. 

In a 7-1 opinion Justice Elena Kagan said the Kentucky court failed to put the nursing home agreements “on equal footing with all other contracts,” as required by the Federal Arbitration Act. 

“If the respondents were right, States could just as easily declare everyone incompetent to sign arbitration agreements,” the opinion reads. “The FAA would then mean nothing at all — its provisions rendered helpless to prevent even the most blatant discrimination against arbitration.”

The decision reverses the Kentucky court's ruling for one of the wrongful death cases and remands a second complaint to state court.