U.S. Supreme Court lets law nullifying nursing home pre-admission arbitration agreements stand

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Frontline, ProPublica slam assisted living sector in documentary airing tonight
Frontline, ProPublica slam assisted living sector in documentary airing tonight
By refusing to review an Illinois appellate court ruling, the U.S. Supreme Court has tacitly agreed that a state law nullifying nursing home arbitration agreements supersedes the Federal Arbitration Act, which favors arbitration agreements, according to a Bureau of National Affairs report.

In the case of SSC Odin Operating Co. v. Carter, Sue Carter originally sued SSC Odin Operating Co. over the alleged wrongful death of Joyce Gott, a former resident of Odin Healthcare Center in Odin, IL. According to a state appellate court ruling, two provisions of the Illinois Nursing Home Care Act prohibit the facility from enforcing an arbitration agreement signed by Gott at the time of her admission. Most notably, the NHCA provisions apply to all contracts involving nursing home residents, not just arbitration clauses, and therefore can be applied to the arbitration agreement signed by Gott, the Appellate Court of Illinois ruled.

The nursing home operator argued that the Federal Arbitration Act should overrule any state law governing arbitration agreements, especially in light of the fact that the NHCA applies to nursing home contracts in a broad and more generalized way, rather than specifically singling out arbitration agreements. The Appellate Court of Illinois, however, shot down that argument in April 2008, saying instead that it is because the NHCA applies so generally to all nursing home contracts that it can be applied in this case. The Illinois Supreme Court refused to review the decision in October of last year. With its June 1 rejection of the case, the U.S. Supreme Court has let the lower court's ruling stand, thereby setting a precedent under which other states' laws might trump the Federal Arbitration Act.