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May 15, 2017 Practice Points

SCOTUS Reverses Kentucky Supreme Court on Arbitration Rule

The Kentucky rule was found to be in violation of the Federal Arbitration Act.

By Sanford Hausler

The U.S. Supreme Court issued its decision in Kindred Nursing Centers L. P. v. Clark. In that case, the Kentucky Supreme Court had held that a person holding a general power of attorney for another could not waive that person’s right to resolve disputes in court, rather than by arbitration, unless the power of attorney specifically said so. The Court reversed in part, vacated in part, and remanded, holding that because the Kentucky Supreme Court’s rule singled out arbitration agreements for special treatment, the rule violated the Federal Arbitration Act, which puts arbitration agreements on the same footing as other contracts. The majority decision was written by Justice Kagan. Judge Thomas dissented, asserting that the Federal Arbitration Act does not apply to proceedings in state court.

Sanford Hausler is of counsel with Cox Padmore Skolnik & Shakarchy LLP in New York, New York.

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