February 21, 2012

Supreme Court Decides Marmet Health Care Center, Inc. v. Brown

On February 21, 2012, the Supreme Court decided Marmet Health Care Center v. Brown, No. 11-391 and 1-394, holding that state and federal courts must enforce the Federal Arbi­tration Act (FAA), 9 U. S. C. §1 et seq., with respect to all arbitration agreements covered by that statute.      

Three plaintiffs brought actions against Marmet Health Care Center, a nursing home, claiming that Marnet's negligence had resulted in the death of a family member. All three decedents had been cared for by Marmet pursuant to contracts that required the parties to arbitrate all disputes. The trial court dismissed the plaintiffs' claims based on the arbitration agreements. The West Virginia Supreme Court reversed, holding that the state's public policy barred a pre-occurrence arbitration agreement in a nursing-home admission contract that required arbitration of a negligence claim that results in personal injury or death. In arriving at this holding, the West Virginia Supreme Court rejected the United States Supreme Court's interpretation of the Federal Arbitration Act (FAA), holding that Congress could not have intended the FAA to apply to personal injury or wrongful death suits that are only tangentially related to a contract, particularly where a necessary service is involved. 

The Supreme Court reversed, holding that its interpretation of the FAA was controlling and that the state court was not free to disregard its precedent.  Because the Supreme Court had held (as recently as last term) that a state law prohibiting arbitration of a particular type of claim is displaced by the FAA, that holding controls. The Court remanded the case to the state court for the narrow inquiry of whether the arbitration provision is unenforceable under state common law principles that are not spe­cific to arbitration and thus not pre-empted by the FAA.

The Court delivered its decision per curiam.

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