U.S. Supreme Court Declines to Review Two Lawsuits Filed Against Nursing Homes Where Heirs Signed Arbitration Agreements

Last week, the United States Supreme Court reportedly refused to consider two wrongful death cases against nursing homes in Illinois and Kentucky where the plaintiff signed an arbitration agreement.  In Carter v. SSC Odin Operating Co., LLC, No. 12-1012, the daughter of a woman who died while in the care of an Illinois nursing home filed a wrongful death lawsuit against the facility.  At the time of the woman’s admission, her daughter, Sue Carter, signed an arbitration agreement on her incapacitated mother’s behalf.  When Carter filed a wrongful death case against the Odin Healthcare Center, the nursing home sought to compel the case to arbitration.  After a number of appeals, the Illinois Supreme Court held that Carter’s lawsuit could proceed despite that she signed the agreement to arbitrate.  According to the court, Carter signed the contract as her mother’s representative and not on her own behalf.

Similarly, in Ping v. Beverly Enterprises, Inc., No. 12-652, the Kentucky Supreme Court held that a woman who brought a wrongful death case against the nursing home where her mother died could proceed with her lawsuit despite that she signed an arbitration agreement when her mother was admitted.  According to the Kentucky court, the woman’s daughter, Donna Ping, signed the agreement on her mother’s behalf using a power of attorney that only authorized her to make financial and healthcare decisions.  The court refused to compel Ping to arbitration because the power of attorney she used when she signed the contract did not authorize her to sign an agreement to arbitrate.

The two nursing homes asked the high court to find that the Federal Arbitration Act preempts state laws that treat a wrongful death claim as an “independent cause of action” separate from an arbitral agreement that patients are required to sign prior to receiving care.  In addition, the nursing homes argued the Supreme Court should review the cases because similar lawsuits in other states resulted in a different outcome.  For example, such a wrongful death claim is considered derivative and subject to arbitration in Texas.  Interestingly, the Supreme Court overturned and remanded a decision from the West Virginia Supreme Court which stated nursing homes could not avoid a wrongful death lawsuit by using an arbitration provision in 2012.  The U.S. Supreme Court held the West Virginia high court misapplied federal law.