Supreme Court Decision on Arbitration Threatens Victim's Rights

On February 21^st, 2012, the United States Supreme Court issued a per curium opinion reversing the judgment of the West Virginia Supreme Court of Appeals in Clayton Brown v. Genesis Healthcare. The decision is a blow, but perhaps not a fatal one to victims' rights in West Virginia, Ohio, Pennsylvania, and around the country. West Virginia's Supreme Court of Appeals had held that Congress did not intend to apply the Federal Arbitration Act to nursing home admission agreements and the U.S. Supreme Court reversed that finding.

Horror stories from nursing homes, particularly those owned by large corporate chains, have become a disturbing facet of American life with an aging population. Chronic understaffing, poorly trained employees, inadequate food and supplies and a mentality of seeking the "almighty dollar" at the expense of patient care has become all too common. Nursing home residents have fallen to their deaths, had injuries neglected to the point of requiring amputations for gangrene and infections, choking deaths, bedsores, deaths from dehydration and starvation and most shockingly injuries and deaths caused by intentional abuse of nursing home residents by staff, have all become frighteningly common. In 2009, a full 54 percent of nursing homes were operating below the proposed standard of care. Detailed studies have recommended raising federal standards and increasing staffing, because companies have not done this on their own in order to provide decent care.

In 2011, in the Brown decision, the West Virginia Supreme Court of Appeals lengthy, detailed and scholarly opinion by Justice Menis Ketchum, held that the Federal Arbitration Act was not intended to apply to injury and death claims arising out of the incidents listed above. Justice Ketchum indicated that when the largely commercial agreement to enter into a nursing home was made, the residents could not be intending (and probably weren't even contemplating) giving up their right to a jury trial if the nursing home negligently or even intentionally hurt or killed them. The Court's opinion explained why Congress would never have intended such an absurd result. Justice Ketchum cited to specific statements by the drafters of the Federal Arbitration Act that "not every case is meant for arbitration," and this was certainly one of those situations.

Unfortunately, the jurisprudence of the United States Supreme Court over the past decade has shown ever increasing zeal to validate corporate decisions to steer as many cases as possible into a biased, secretive and fundamentally unfair arbitration process. West Virginia's judiciary has known about the arbitration scheme for decades, at least as far back as Richard Neely's famous article: "Arbitration and the Godless Bloodsuckers." Without an impartial judge or jury, victims can be stripped of their basic right to present evidence regarding their claim, discovery the truth about what happened to them or loved ones, and most importantly to receive a legitimate decision. If companies can take all that away in the fine print, what rights do we really have? The extreme one-sidedness of these arbitration provisions cries out for remediation through the Doctrine of Unconscionability, a state law doctrine that is still available in West Virginia for challenging nursing home arbitration agreements.

The Brown decision sought to bypass case-by-case unconscionability determinations in light of the obvious psychological pressure our elderly are under when a time to receive nursing home care arrives. Through detailed examination of the legislative history and case law, Justice Ketchum concluded that Congress simply did not intend to sweep these types of claims under the umbrella of the Federal Arbitration Act. Unfortunately, the Supreme Court of the United States has disagreed and there is no recourse from that Court.

The only certainty in the wake of the Supreme Court's decision is that Americans living in West Virginia, Ohio, Pennsylvania, and across the country are not about to abandon their elderly to be victimized by corporate greed and unfair processes. While the United States Supreme Court seems all too unconcerned about this, the West Virginia Supreme Court of Appeals, The Supreme Court of Ohio and The Supreme Court of Pennsylvania still have available to them the state law doctrine of Unconscionability which trumps the Federal Arbitration Act's preference for arbitration so long as the state law of unconscionability is a general applicable rule and does not specifically direct itself at arbitration agreements. The United States Supreme Court's decision will require state court judges and justices to "crack open the books" regarding these older state law contract-law doctrines and make sure they are rigorously applied in every case where a corporation claims it has a valid agreement entered into voluntarily with a "meeting of the minds" to arbitrate any type of case, including cases of nursing home negligence and abuse.

Additionally, the Supreme Court of the Unites States' decision is a glaring call for Congress to amend and reform the Federal Arbitration Act to remove the pernicious and dangerous interpretations placed upon it by the Supreme Court of the United States. Ultimately, if large corporations can write all the rules in the fine print of the form contracts that pervade every aspect of American life, they can and will write those rules in such a way that they are insulated and immunized against any liability for wrongful, negligent and even intentional harms and abuses.

Bordas & Bordas successfully fought off a demand for arbitration in a recent case handled by Jamie Bordas. In that case, homeowners and their children were subjected to toxic exposure by a homebuilder. Bordas & Bordas won a ruling that the arbitration contract the company wanted to use was Unconscionable and the case proceeded in Court where it was resolved. Bordas and Bordas will continue to fight attempts to restrict its clients' rights of access to the court because it is the right thing for our clients and also because free, open and accountable systems of justice are among the most essential guarantees of the Bill of Rights of a free society.

--Christopher Regan