Outsourcing Justice

Trump, Nursing Homes, and Arbitration

Today, the Supreme Court heard oral argument in Kindred Nursing Centers v. Clark.  I submitted an amicus brief in this case in support of the nursing home residents.  You can find the oral argument transcript here and all the briefs here.

What struck me about the oral argument is that the Justices usually are very supportive of arbitration and the business side.  However, in this case, the Justices questioned Andrew Pincus, the attorney for the nursing homes, very aggressively.  Justice Kennedy and others portrayed Kentucky’s rule as neutral, since the rule applies to the waiver of all fundamental rights, and as a result, the rule is not targeting arbitration.   Under the state rule at issue, an agent cannot waive fundamental rights, such as the right to a jury trial, unless there is explicit, written authorization to do so.  Justice Alito expressed his belief that this case is in a different category than other Supreme Court arbitration cases because personal injury claims are at stake; he suggested that Kentucky’s rule may be squarely within the police powers of a state to protect the health of nursing home residents.

If Justice Breyer writes the majority opinion, like he did in the Court’s most recent arbitration case, DirecTV v. Imburgia, he will slam the state of Kentucky, just like he rebuked the state of California, for displaying a nefarious hostility to arbitration, disguised in a neutral state rule.  However, Justice Kagan suggested that the Court should give states the benefit of the doubt as acting in good faith.

Ultimately, the outcome of this case will boil down to whether the Justices think the Kentucky Supreme Court was hostile to arbitration or not.  The rule developed by the Kentucky Supreme Court applies to the waiver of all fundamental rights, and thus, the rule appears neutral on its face.  But at the same time, this rule was first developed in the context of invalidating an arbitration clause, suggesting the rule was designed with the purpose of undermining arbitration.  It’s tough to predict what will happen, but the outcome will depend on how the Justices interpret the Kentucky rule and whether the rule was adopted to undermine arbitration.

One more thought: I wonder if there is a Trump effect with the case (as a side note, Ivanka Trump and her daughter were in attendance during oral argument as guests of Justice Kennedy, but I’m thinking of broader concerns arising from the Bully-in-Chief.)  In the aftermath of the President’s executive order on immigration, the judiciary reminded the country that the courts play a fundamental role in preventing an unconstitutional overreaching by the federal government, and I’m wondering if the Justices are perhaps being more sensitive to issues of overstepping boundaries.  Justice Alito had a strong exchange with Mr. Pincus, the attorney for the nursing homes, where Justice Alito suggested that the ability to protect nursing homes residents was within a state’s police powers, and the powers of the federal government should not override these state rights.  I am wondering whether, in this new political environment, the Justices are getting ready to dust off the state rights rationale as a way to limit federal government power, in the expectation that the new administration will try to overstep its bounds in different areas of the law.  Also, in some ways, the debate about the president’s executive order mirrors the debate in this case.  Did a seemingly-neutral executive order, which halted immigration from certain countries, display an anti-Muslim bias, especially given Trump’s prior statements during his campaign, and does the Kentucky rule in this case, although seemingly-neutral on its face, display a bias against arbitration, considering that the rule was first announced in an arbitration case?

I look forward to reading the opinion(s) in this case, which may involve an odd coalition of Justices reaching across the political spectrum.

One thought on “Trump, Nursing Homes, and Arbitration

  1. Marley Weiss

    Or maybe some of the justices find it easy to imagine themselves in a few years in the position of the helpless/hapless nursing home patients.

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