Supreme Court declines to review SNF arbitration case

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The Supreme Court won't review a Texas court's ruling on a case involving arbitration of a nursing home wrongful death lawsuit, giving a victory to the provider, the court announced Monday.

The case, Perez v. The Fredericksburg Care Co., was brought against the Fredericksburg Care Co. of San Antonio, TX, by the survivors of Elisa Zapata, who was a resident at a Fredericksburg facility. The plaintiffs claimed Zapata's death came as a result of the staff's negligent care.

Fredericksburg moved to compel arbitration because of a clause in Zapata's admission agreement. Zapata's family argued that agreement was void because it didn't comply with a provision of the Texas Medical Liability Act that requires arbitration agreements to contain “10-point boldface type clearly and conspicuously stating” a consumer warning.

A trial and appeals court sided with Zapata's family in denying a motion to compel arbitration, citing a 1944 law, the McCarran-Ferguson Act, which it said did not allow state arbitration agreements to be preempted by federal law.

But the Texas Supreme Court overturned that decision, ruling that the Federal Arbitration Act preempts both the TMLA and the McCarran-Ferguson Act, and that arbitration could proceed.

While the Texas Supreme Court's ruling wouldn't be relied upon in settling arbitration disputes outside of the state, several other state high courts have followed Texas' lead on arbitration cases in the past, Bloomberg BNA reported.

The Supreme Court's decision not to review the case may deter consumers, and pave the way for more standard arbitration language in resident agreements, according to previous reports.