On May 15, 2017, in a closely-watched case involving arbitration clauses in nursing home contracts and powers of attorney, the U.S. Supreme Court held that the Federal Arbitration Act preempted a rule applied by the Kentucky Supreme Court when it refused to enforce two binding arbitration agreements between a nursing home and individuals holding general powers of attorney on behalf of two former residents of the nursing home. Kindred Nursing Centers Ltd v. Clark, et al.
As part of the nursing home’s resident intake process, the two individuals holding powers of attorney entered into arbitration agreements on behalf of their relatives that contained a provision requiring that “[a]ny and all claims or controversies arising out of or in any way relating to . . . the Resident’s stay at the Facility” would be resolved through “binding arbitration.” After the death of their family members, the individuals holding powers of attorney sued in state court, alleging that the nursing home had delivered substandard care, causing the deaths of their family members. The Kentucky Supreme Court applied a “clear-statement rule” in holding that both arbitration agreements were invalid because the powers of attorney did not specifically state that the representatives could enter into an arbitration agreement, and therefore the individuals holding powers of attorney were prohibited from restricting their relatives’ rights of access to the courts and trial by jury guaranteed under the Kentucky Constitution.