Federal Appellate Court Affirms Kentucky Wrongful Death Claimants Not Bound By Nursing Home Arbitration Agreement

162017_132140396847214_292624_nIn its decision filed on January 15, 2016, the United States Court of Appeals For The Sixth Circuit (“Appellate Court”) affirmed that the wrongful death beneficiaries who filed a nursing home wrongful death claim in Kentucky were not bound by the nursing home arbitration agreement signed by the decedent at the time he was admitted to the defendant nursing home but was not signed by them.

The Appellate Court affirmed that the Federal Arbitration Act (“FAA”) did not preempt the plaintiffs’ wrongful death claims because in determining the enforceability of an arbitration agreement, state law of contract formation applies. And in the Kentucky case it was deciding, the Kentucky Supreme Court had previously held that a wrongful death claim is independent of any claims held by a decedent, which means that a wrongful death claim is a distinct interest in a property right that belongs only to the statutorily-designated beneficiaries (i.e., decedents have no cognizable legal rights in that claim).

The Appellate Court stated that there were only two parties to the nursing home arbitration agreement in the Kentucky case: the nursing home and the decedent. Because the wrongful death claim is independent in nature under Kentucky law, the decedent possessed no cognizable legal rights in the wrongful death claim arising upon his demise when he signed the nursing home arbitration agreement. Accordingly, the Appellate Court held that the nursing home arbitration agreement cannot be enforced against wrongful death beneficiaries.

The Appellate Court further held that the fact that the nursing home arbitration agreement purports to extend to wrongful death claims makes no difference (the Kentucky nursing home arbitration agreement stated, in part: “It binds [the nursing home resident] and all persons with claims through or on behalf of him, including ‘any personal representative, responsible party, guardian, executor, administrator, legal representative, agent or heir’”): the decedent’s purported agreement to do something he was not authorized to do is not legally enforceable.

FAA Preemption Of State Law

The Appellate Court cited a recent U.S. Supreme Court case regarding the test for FAA preemption of state law. There are two situations in which a state rule is preempted by the FAA: (1) when state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: the conflicting rule is displaced by the FAA, or (2) when a doctrine normally thought to be generally applicable is alleged to have been applied in a fashion that disfavors arbitration, the court must determine whether the state law rule would have a “disproportionate impact” on arbitration agreements (this type of disproportionate impact stands as an obstacle to the accomplishment of the FAA’s objectives).

With regard to the first situation, the Appellate Court noted that Kentucky law does not categorically prohibit arbitration of wrongful death claims: nothing precludes those beneficiaries from entering into arbitration agreements – it only concludes that wrongful death beneficiaries are not bound by agreements that are executed by the decedent.

With regard to the second situation, the Appellate Court noted that Kentucky law is indifferent to arbitration: wrongful death beneficiaries are no more or less bound by a decedent’s agreement to arbitrate than they are by a decedent’s waiver of certain claims, selection of a forum to litigate disputes, or selection of the law governing an agreement.

Furthermore, the Appellate Court noted that the Kentucky case is not about preemption – it is about consent. In the Supreme Court case that discussed FAA preemption and found that the FAA preempted California arbitration laws in that case, the Supreme Court made the signatories to the arbitration agreement live up to the terms of the agreement, which included a class-action waiver provision – the Supreme Court struck down the state rule that the signatories tried to use as an escape hatch in an effort to avoid bilateral arbitration. In the Kentucky case, federal law does not force arbitration upon a party that never agreed to arbitrate in the first place under the guise of preemption principles.

Source Richmond Health Facilities – Kenwood LP, et al. v. Nichols, No. 15 – 5062.

If you or a loved one suffered injuries (or worse) while a resident of a nursing home in Kentucky or in another U.S. state due to nursing home neglect, nursing home negligence, or nursing home abuse, you should promptly find a local nursing home claim lawyer in your U.S. state who may investigate your possible nursing home claim for you and file a nursing home claim on your behalf, if appropriate.

Click here to visit our website to be connected with medical malpractice lawyers (nursing home claim lawyers) in your U.S. state who may be able to assist you with your nursing home claim, or call us toll-free in the United States at 800-295-3959.

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This entry was posted on Friday, February 26th, 2016 at 5:18 am. Both comments and pings are currently closed.

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