Watershed in U.S. Supreme Court

09 Oct 2018
Firm Announcement

On October 9, 2018, the U.S. Supreme Court denied a corporate defendant’s request for review of the Wilkes & McHugh case, Kindred Nursing Centers v. Wellner. SCOTUSblog, a popular legal news website covering the U.S. Supreme Court, noted the denial marked, “the first time in the 21st century that the [U.S. Supreme Court] has denied cert on an arbitration pre-emption question,” and characterized the decision as a “watershed.” 

It certainly constituted a watershed victory for the rights of consumers faced with adhesion arbitration agreements. Arbitration agreements are contracts that require parties to settle disputes outside of court.  Nursing home staff often pressure family members with powers of attorney to sign these agreements when they are admitting their loved ones to a nursing home.  The family members typically do not find out until much later that they have inadvertently given up their loved one’s “day in court” for negligence and abuse at the nursing home. 

However, as Wilkes & McHugh attorney Robert Salyer argued in his oral argument before the U.S. Supreme Court last year:

“[N]o principal who grants the power to [the] attorney-in-fact to buy and sell property or engage in contracts involving property would ever think about [the] attorney-in-fact [engaging] in one of these arbitration agreements.”

With Kindred v. Wellner, the U.S. Supreme Court has acknowledged that federal arbitration law does not govern how powers of attorney work under state law.  Under Kentucky law, a power of attorney encompassing authority over a person’s property and legal affairs does not thereby encompass authority to execute a pre-dispute arbitration agreement.

The original lawsuit in Kindred v. Wellner involved the wrongful death of a nursing home resident.  When the resident entered the facility, his spouse with power of attorney unknowingly signed an arbitration agreement.  Upon the release of the U.S. Supreme Court’s decision, the family and the deceased’s estate finally got their day in court. 

“I was extremely gratified to see that the U.S. Supreme Court upheld what was the most important thing to me: Questions of interpretation of State law remain at the State level. We prevented federal meddling in the ability of the average citizen to take his or her grievance to the local courthouse,” Salyer said.