Brown ex rel. Brown v. Genesis Healthcare Corp.
229 W. Va. 382
| W. Va. | 2012Background
- Consolidation of three wrongful death suits arising from alleged nursing home negligence.
- All three contracts with nursing homes contained arbitration clauses; plaintiffs argued clauses were unconscionable and unenforceable.
- This Court previously decided Brown I (2011), addressing preemption of WV Nursing Home Act sections and the FAA, including Syllabus Point 21 on pre-negligence arbitration.
- Supreme Court of the United States reversed Syllabus Point 21 and remanded to consider unenforceability under state common law unconscionability principles not specific to arbitration.
- On remand, this Court overruled Syllabus Point 21 and remanded Brown and Taylor for evidence development on unconscionability; Marchio’s issue regarding Section 15(e) preemption was answered Yes.
- Orders dismissing arbitration in Brown and Taylor were reversed and remanded for full development of the unconscionability record; Marchio’s FAA preemption issue certified as Yes.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Brown I's Syllabus Point 21 is overruled | Brown argues Syllabus Point 21 governs and disfavors FAA preemption. | Supreme Court reversed Syllabus Point 21; FAA does not align with that holding. | Yes, Syllabus Point 21 overruled. |
| Whether arbitration clauses in nursing home contracts are unconscionable under state law post-remand | Clauses were unconscionable given signing circumstances and terms. | Clauses are enforceable under state law and not unconscionable. | Remanded for evidentiary development on unconscionability. |
| Whether discovery should be allowed to develop the unconscionability record | Discovery is necessary to prove unconscionability. | Record sufficiency should be evaluated before discovery. | Remand permitted discovery to develop the record. |
| Whether WV Nursing Home Act preemption by the FAA extends to the pre-negligence clause | Act provisions are preempted by FAA. | FAA preemption is limited; not all provisions are preempted. | Yes, preemption issue addressed; Marchio remanded with Yes on preemption as reformulated. |
Key Cases Cited
- Brown v. Genesis Health Care Corp., 228 W.Va. 646 (2011) (reaffirmed unconscionability framework for nursing-home arbitration)
- Marmet Health Care Center, Inc. v. Brown, 565 U.S. - (2012) (Supreme Court reversed Brown I's Syllabus Point 21 on FAA applicability)
- State ex rel. Richmond American Homes v. Sanders, 228 W.Va. 125 (2011) (adhesion contracts and costs considered in substantive unconscionability)
- State ex rel. Dunlap v. Berger, 211 W.Va. 549 (2002) (adhesion contracts and unconscionability guidance used in analysis)