NJ Courts: Heed Loud-and-Clear Message on Arb Clauses
In KindredNursing Centers L.P. v. Clark, the U.S. Supreme Court's "we really mean it" tone must be taken to heart in New Jersey.
June 02, 2017 at 06:05 PM
10 minute read
It is fairly easy to tell when Supreme Court justices are annoyed that courts are resisting clear legal precepts announced in earlier cases. In some instances, the court will grant certiorari, and summarily reverse and remand with an instruction “in light of” the earlier precedent. In KindredNursing Centers L.P. v. Clark, 137 S. Ct. 1421 (May 15, 2017), the court took a more unforgiving tone when reversing the Kentucky Supreme Court's effort to establish a limitation on arbitration contracts in nursing home agreements. The court's “we really mean it” tone must be taken to heart in New Jersey.
In Kindred, the arbitration contracts were signed by relatives granted standard, broad powers of attorney to conduct “legal proceedings” and enter into contracts. The Kentucky Supreme Court found those powers of attorney lacked sufficiently “specific” authorization to enter into arbitration agreements, and, hence, the arbitration agreements were not valid. In its view, the “divine God-given right” to a jury trial enshrined in the Kentucky Constitution could be relinquished only by a “clearly expressed” waiver.
At oral argument before the U.S. Supreme Court, the justices sometimes seemed impatient with the respondent's efforts to explain that Kentucky had not simply invented a strict rule for powers of attorney that applied only to arbitration agreements and, thus, ran afoul of cases as recent as DIRECTV, Inc. v. Imburgia—holding that arbitration agreements governed by the Federal Arbitration Act must be placed “on equal footing with all other contracts.”
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