West Virginia courts incorrectly applied federal law in nursing home arbitration cases, U.S. Supreme Court rules

The West Virginia Supreme Court must re-examine a major ruling that make nursing home arbitration agreements invalid, according to a U.S. Supreme Court decision Tuesday.

The high court said that the West Virginia state Supreme Court applied the Federal Arbitration Act incorrectly when it said nursing homes shouldn't use binding arbitration clauses in resident contracts to protect against wrongful death and personal injury lawsuits, the Charleston Daily Mail reported. That's good news for the state's nursing homes, which use the agreements to protect against unnecessary and costly litigation.

In its opinion, the Supreme Court urged the state court to reconsider cases where this statute was applied in nursing home arbitration.

"The West Virginia court's interpretation of the FAA was both incorrect and inconsistent with clear instruction in the precedents of this Court," the court's unsigned opinion states.

Mark Parkinson, the president and CEO of the American Health Care Association and National Center for Assisted Living, said the organization is pleased the court "recognizes that federal law upholds the validity of pre-dispute agreements used in nursing homes.

"The US Supreme Court has made clear that it is both legal and appropriate for nursing homes and patients to use pre-dispute arbitration agreements in admission agreements," he said in a statement. "It is affirming to us that the Supreme Court understands and enforces arbitration agreements to provide more timely and less adversarial conclusions, thus allowing facility staff to focus their time and effort on what is really important – quality patient care.”