Last week, the U.S. Supreme Court reversed and remanded orders of the Supreme Court of Appeals of West Virginia which held unenforceable all predispute arbitration agreements that apply to claims alleging personal injury or wrongful death against nursing homes. See Marmet Health Care Center, Inc., et al. v. Clayton Brown, et al., Case Nos. 11–391 and 11–394, 565 U. S. ____ (Feb. 21, 2012).
The underlying litigation involves three negligence lawsuits brought by family members of patients who have died in West Virginia nursing homes. The Supreme Court of Appeals of West Virginia consolidated the cases and held that “as a 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 a personal injury or wrongful death, shall not be enforced to compel arbitration of a dispute concerning the negligence.”
The U.S. Supreme Court stated that “[t]he FAA provides that a ‘written provision in … a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction… shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.’” The Court also noted that the relevant statute does not include exceptions for personal injury or wrongful death claims. Citing AT&T v. Concepcion, the Court added: “[w]hen state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced by the FAA.”
Accordingly, the Court remanded for the West Virginia court to consider whether, absent that general public policy, the arbitration clauses in the cases are unenforceable under state common law principles that are not specific to arbitration and pre-empted by the FAA.