Kindred Nursing Centers, L. P. v. Clark
The Court struck down a Kentucky rule that let courts void nursing-home arbitration agreements unless the power of attorney used to sign them specifically mentioned arbitration, ruling that this singled out arbitration contracts for unfair treatment.
Because federal arbitration law requires courts to treat arbitration agreements the same as any other contract, states cannot invent special hurdles - even ones dressed up as protecting constitutional rights - that apply only to arbitration.
How it got here: Kentucky trial and appellate courts let the estates' lawsuits proceed despite the arbitration agreements; the Kentucky Supreme Court affirmed, and the nursing home appealed to the U.S. Supreme Court.
The Case in Depth
What happened
Two women held powers of attorney letting them handle their relatives' affairs. When their father and mother, respectively, moved into a Kindred-run nursing home, each signed an arbitration agreement on the relative's behalf. After both residents died, their estates sued the nursing home for substandard care, and the nursing home tried to force the disputes into arbitration under the signed agreements.
The question before the Court
Could a state require that a family member's power of attorney specifically mention arbitration before it could be used to sign a nursing home arbitration agreement?
Why it matters
Families who use a power of attorney to sign nursing home or similar contracts on behalf of a relative will find those arbitration agreements enforced even without special wording, meaning disputes over care and injuries may have to go to arbitration instead of a jury trial. States can no longer add extra requirements aimed specifically at arbitration clauses.
What changes now
The daughter's arbitration agreement must now be enforced because the state court's decision rested only on the invalid clear-statement rule. The wife's case is sent back to the Kentucky Supreme Court to decide, without relying on that rule, whether her power of attorney was broad enough to allow her to sign the arbitration agreement in the first place. This is a final merits ruling, though one part of the case still requires further state-court proceedings.
What this does not decide
The Court did not decide whether the wife's power of attorney actually authorized her to sign an arbitration agreement - that question goes back to the Kentucky Supreme Court to answer without using the now-invalid clear-statement rule.
Concurrences and dissents
How the Justices voted
Majority (7). Justice Kagan (author), joined by Justice Roberts, Justice Kennedy, Justice Ginsburg, Justice Breyer, Justice Alito, and Justice Sotomayor.
Dissent (1). Justice Thomas (author).
Dissent — Justice Thomas
Justice Thomas argued, consistent with his long-held position, that the Federal Arbitration Act does not apply in state court proceedings at all. Because the Act does not displace state rules in that context, he would have let Kentucky's requirement of express authorization for waiving a jury trial stand, and would have affirmed the Kentucky Supreme Court's judgment entirely. Read the full dissent →
How the Court got there
The legal reasoning, step by step
- The Court applied the equal-treatment principle drawn from the Federal Arbitration Act: a state can invalidate an arbitration agreement only under contract rules that apply to contracts generally, not rules that single out arbitration or turn on the very feature that makes an agreement an arbitration agreement.
- The Kentucky rule required a power of attorney to specifically mention arbitration before an agent could sign such an agreement, justified as protecting the state constitutional right to a jury trial - but the Court found this rule keyed directly to the defining trait of arbitration agreements, the waiver of a court proceeding.
- The Court noted that Kentucky did not require similarly explicit authorization for other contracts that also waive the right to go to court, such as settlement agreements or agreements to a bench trial, showing the rule was not truly a general one about constitutional rights.
- The Court rejected the argument that the federal law only governs enforcing arbitration agreements already formed and has nothing to say about how they are formed, explaining that the statute also protects the initial validity of arbitration agreements, so rules skewing formation are equally covered.
- The Court warned that accepting a formation-only exception would let states gut the federal law entirely, for instance by declaring everyone incapable of signing arbitration agreements, so long as the rule was framed as being about contract formation.
Doctrinal impact
Cases affected by this decision
Reaffirms AT&T Mobility LLC v. Concepcion (563 U. S. 333)
The Court relies on Concepcion's rule that states cannot single out arbitration agreements for special burdens.
Reaffirms Marmet Health Care Center, Inc. v. Brown (565 U. S. 530)
Cited as precedent for vacating and remanding when unclear how a tainted rule influenced a state court's alternative holding.