SCOTUS to States: Keep Out of Arbitration Agreements
The 7-1 ruling could have broader ramifications for the nursing home industry in particular and businesses in general when it comes to the Federal Arbitration Act.
May 15, 2017 at 01:12 PM
4 minute read
The U.S. Supreme Court on Monday continued its streak of pro-arbitration rulings, reaffirming in a closely watched nursing home case that states may not impose rules that single out, overtly or otherwise, arbitration agreements for negative treatment.
The 7-1 ruling came in Kindred Nursing Centers v. Clark, a seemingly narrow case that could have broader ramifications for the nursing home industry in particular and businesses in general that look to the Federal Arbitration Act to protect arbitration agreements from invalidation under state laws.
“The FAA … preempts any state rule discriminating on its face against arbitration,” Justice Elena Kagan wrote for the majority, adding that the law also “displaces any rule that covertly accomplishes the same objective by disfavoring contracts that (oh so coincidentally) have the defining features of arbitration agreements.”
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