Legal Alert: U.S. Supreme Court Decision on FAA Preemption Overrules West Virginia High Court

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On February 21, 2012, the U.S. Supreme Court, in a Per Curiam opinion, reinforced the preemption of the Federal Arbitration Act (FAA) with respect to all arbitration agreements governed by the statute. See Marmet Health Care Center v. Brown et al. (Feb. 21, 2012). The Court's decision in this non-employment case continues the line of Supreme Court decisions holding that the FAA preempts state laws that would undermine the enforceability of arbitration agreements.

In this decision, representatives of three patients had signed admission agreements for nursing home patients, which included a broad arbitration agreement for the resolution of disputes. After the patients' deaths, their representatives sued in state court asserting tort claims for negligence and wrongful death. The West Virginia Supreme Court of Appeals (the state's highest court) subsequently refused to enforce the arbitration agreement based on public policy and with some alternative suggestion of unconscionability under state contract law, holding:

[A]s a matter of public policy under West Virginia law an arbitration clause in a nursing home admission agreement adopted prior to an occurrence of negligence that results in a personal injury or wrongful death, shall not be enforced to compel arbitration of a dispute concerning negligence.

Please see full alert below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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