Marmet Health Care Center, Inc. v. Brown
February 21, 2012
Case #: 11–391 & 11-394
Full Text Opinion: http://www.supremecourt.gov/opinions/11pdf/11-391.pdf
Contract Law: West Virginia's prohibition of pre-dispute agreements to arbitrate personal-injury or wrongful-death claims against nursing homes is contrary to the terms and coverage of the Federal Arbitration Act (FAA).
This case involves three negligence suits against nursing homes. Each suit alleged that negligence caused injuries or harm resulting in death. In each case, a family member of the patient had signed an agreement that contained an arbitration clause. The West Virginia Supreme Court consolidated all three cases. It held that “as matter of public policy under West Virginia law, an arbitration clause in a nursing home admission agreement adopted prior to an occurrence of negligence that results in personal injury or death shall not be enforced to compel arbitration of a dispute concerning the negligence.” The court also concluded that the FAA did not preempt the state’s public policy on arbitration agreements applying to claims of personal-injury or wrongful-death.
The Supreme Court granted certiorari and vacated the state court decision. It explained that the FAA includes no exceptions for personal-injury or wrongful-death claims, and where state law prohibits arbitration for a particular type of claim, “the conflicting rule is displaced by the FAA.” The state’s prohibition is a categorical rule prohibiting arbitration of a particular type of claim, which is contrary to the terms and coverage of the FAA. Lastly, the Supreme Court addressed the state court’s alternative holding that the arbitration clauses were unconscionable. The Court remanded with instructions that the state court must consider whether, absent general public policy, the arbitration clauses are unenforceable under state common law rules that are not specific to arbitration and preempted by the FAA.