wednesday, 17 may of 2017

Supreme Court rules power of attorney need not expressly allow arbitration

The US Supreme Court issued an opinion for Kindred Nursing Centers Limited Partnership v. Clark on Monday holding that the Federal Arbitration Act preempts a Kentucky state law that requires a power-of-attorney agreements to expressly grant authority to enter an arbitration agreement.

The Kentucky Supreme Court ruled that arbitration agreements signed by legal representatives of nursing home residents were invalid, unless the ability to so sign is specified as a power of the representative, as being against the right to have a jury trial.

The Supreme Court, however, found that the FAA "preempts any state rule discriminating on its face against arbitration" and that "hostility to arbitration" is what "led Congress to enact the FAA."

Justice Thomas dissented stating that the FAA does not apply to proceedings in state courts and "does not displace a rule that requires express authorization from a principal before an agent may waive the principal's right to a jury trial."

The Supreme Court has decided multiple cases in favor of arbitration agreements and the FAA in the recent past.

In DIRECTV, Inc. v. Imburgia, the court held 6-3 that the FAA preempts a California court's refusal to enforce an arbitration clause in a contract.

In Nitro-Lift Technologies v. Howard, the court unanimously concluded that the FAA preempted an Oklahoma state court from determining whether an employment contract violated an Oklahoma law that limited the enforceability of non-competition agreements.

Holding that only an arbitrator could determine whether the contract violated state law, the Supreme Court simply cited its prior precedent, which purported to rely on congressional intent in passing the FAA in 1925.

In Marmet Health Care v. Brown, the court repudiated West Virginia's categorical bar invalidating arbitration agreements that involve personal injury or wrongful death in nursing homes.

(Published by Jurist - May 15, 2017)

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