November 28, 2017 Articles

Kindred Nursing Centers L.P. v. Clark: Flouting the Court’s Precedents or Contract Defenses?

By Marcia L. Adelson and Joan D. Hogarth

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. But the inquiry becomes more complex when a doctrine normally thought to be generally applicable, such as duress or . . . unconscionability, is alleged to have been applied in a fashion that disfavors arbitration.

AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 341 (2011).

Kindred Nursing Centers L.P. v. Clark,  137 S. Ct. 1421 (2017), represents yet another state challenge to the application of the Federal Arbitration Act of 1925 (FAA), 9 U.S.C. §§ 1–16, to pre-dispute mandatory arbitration agreements, i.e., arbitration agreements affecting consumers, primarily—nursing home residents, credit card holders, or employees, for example. This was one of the more recent arbitration cases granted certiorari by the U.S. Supreme Court in which the Court confirmed its long-standing position and held that any state laws, rules, or schemes that frustrate the objectives of arbitration shall be deemed preempted by the FAA. So in Kindred, despite the sensitive nature of the case, nursing home admissions, the Court performed its usual analysis under federal preemption and its "equal treatment" rules for arbitration agreements. This article discusses the Court's well-established and repeatedly reinforced rules on arbitration agreements under the FAA, as seen in one of its landmark cases; the continued effort by state courts to reject arbitration agreements for certain types of claims, as is evidenced in Kindred Nursing Centers L.P. v. Clark; and the outlook for state laws and precedents that currently reject the use of arbitration to resolve certain types of claims.

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