Kindred Nursing Centers, L. P. v. Clark
2017 U.S. LEXIS 2948
SCOTUS2017Background
- Beverly Wellner and Janis Clark held powers of attorney for Joe Wellner and Olive Clark, respectively, and signed nursing-home admission paperwork on their principals’ behalf.
- Each agent signed an arbitration agreement (binding arbitration for claims arising from the resident’s stay) on behalf of her principal.
- After Joe and Olive died, their estates sued Kindred for wrongful death and malpractice; Kindred moved to compel arbitration.
- Kentucky trial court and court of appeals denied enforcement; Kentucky Supreme Court consolidated and affirmed, applying a "clear-statement" rule requiring express authorization in a power of attorney to waive a principal’s right to jury trial and access to courts.
- The U.S. Supreme Court granted certiorari to decide whether Kentucky’s clear-statement rule is preempted by the Federal Arbitration Act (FAA).
Issues
| Issue | Plaintiff's Argument (Clark/Wellner) | Defendant's Argument (Kindred) | Held |
|---|---|---|---|
| Whether a state rule requiring express power-of-attorney authorization to enter arbitration agreements is valid | Kentucky may require express authorization as a limitation on agents waiving constitutional rights; rule applies generally to fundamental rights | The clear-statement rule discriminates against arbitration and is preempted by the FAA | The clear-statement rule violates the FAA because it singles out arbitration for disfavored treatment; invalid as applied to Clark’s agreement (reversed) |
| Whether the FAA governs contract-formation rules (not only enforcement) | The FAA applies only after formation; states may set rules on whether arbitration agreements were validly formed | The FAA’s language on arbitration agreements includes validity and so preempts formation rules that single out arbitration | FAA covers formation issues; states cannot apply rules that selectively invalidate arbitration agreements |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (preemption of state rules that single out arbitration)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (FAA places arbitration agreements on equal footing with other contracts)
- Morgan Stanley Capital Group Inc. v. Public Utility Dist. No. 1 of Snohomish Cty., 554 U.S. 527 (duress as a formation defense applies under FAA analysis)
- Perry v. Thomas, 482 U.S. 483 (FAA preempts state laws that interfere with arbitration agreements)
- Marmet Health Care Center, Inc. v. Brown, 565 U.S. 530 (vacatur/remand where state court’s arbitration-specific rule may have tainted other holdings)