Kindred Nursing Ctrs. Ltd. P'ship v. Clark
137 S. Ct. 1421
| SCOTUS | 2017Background
- Kindred Nursing Centers required arbitration agreements in admission paperwork at Winchester Centre; two residents (Joe Wellner, Olive Clark) had their POAs executed by wife (Beverly) and daughter (Janis) who signed arbitration agreements on the residents’ behalf.
- Joe and Olive died; their estates (represented by the same agents) sued Kindred in Kentucky state court for wrongful death and inadequate care.
- Kindred moved to compel arbitration; trial court and Kentucky Court of Appeals denied; Kentucky Supreme Court (split) affirmed but adopted a new rule: an agent needs an express, clear statement in the power of attorney to waive the principal’s constitutional rights of access to courts and trial by jury.
- Kentucky court invalidated both arbitration agreements under that clear-statement rule, even though one POA (Clark) was broadly worded and arguably covered arbitration.
- Supreme Court granted certiorari to decide whether Kentucky’s clear-statement rule unlawfully discriminates against arbitration in violation of the Federal Arbitration Act (FAA).
Issues
| Issue | Plaintiff's Argument (Estates) | Defendant's Argument (Kindred/FAA) | Held |
|---|---|---|---|
| Whether a state rule requiring a clear, express POA grant to waive court access/jury trial singles out arbitration and is preempted by the FAA | Kentucky’s rule protects sacred constitutional jury and access rights and reasonably requires explicit delegation before an agent can waive them | FAA requires arbitration agreements be treated like other contracts; a rule that targets the defining feature of arbitration (waiver of judicial forum/jury) is preempted | Yes. The clear‑statement rule discriminates against arbitration and violates the FAA; it cannot be applied to invalidate arbitration agreements |
| Whether FAA governs not only enforcement but also formation challenges to arbitration agreements | POAs affect contract formation; state rules about formation fall outside FAA scope | FAA’s §2 protects validity as well as enforceability; formation defenses cannot be applied in a way that disfavors arbitration | FAA applies to formation rules that single out arbitration; states cannot use formation doctrine to nullify FAA’s equal‑treatment principle |
| Remedy for Clark and Wellner cases after finding state rule preempted | N/A (respondents argued state rule valid) | Kindred argued the Clark agreement must be enforced; Wellner requires remand if state decision was tainted by the invalid rule | Reversed in part: enforce Clark–Kindred arbitration agreement; vacated and remanded the Wellner judgment for reconsideration free of the clear‑statement rule |
| Whether state courts may adopt new generally applicable rules in arbitration cases | Kentucky claimed its rule was generally protective of constitutional rights | Kindred argued the rule was actually tailored to arbitration and thus not general | State courts may announce new generally applicable rules, but the rule must truly apply generally and not single out arbitration to survive FAA preemption |
Key Cases Cited
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (arbitration agreements are treated like other contracts)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (state rules that single out arbitration are preempted by the FAA)
- Perry v. Thomas, 482 U.S. 483 (FAA’s equal‑treatment principle applied to state law defenses)
- Morgan Stanley Capital Group Inc. v. Public Util. Dist. No. 1 of Snohomish Cty., 554 U.S. 527 (doctrines addressing contract formation fall within FAA scrutiny)
- Marmet Health Care Center, Inc. v. Brown, 565 U.S. 530 (vacatur/remand when state decision may have relied on erroneous arbitration‑specific rule)
- Allied‑Bruce Terminix Cos. v. Dobson, 513 U.S. 265 (dissent reference regarding FAA’s application in state courts)