69–006 

110TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 110–894 

FAIRNESS IN NURSING HOME ARBITRATION ACT OF 2008 

SEPTEMBER 26, 2008.—Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 

Mr. CONYERS, from the Committee on the Judiciary, 

submitted the following 

R E P O R T 

together with 

MINORITY VIEWS 

[To accompany H.R. 6126] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on the Judiciary, to whom was referred the bill 

(H.R. 6126) to amend chapter 1 of title 9 of United States Code 

with respect to arbitration, having considered the same, reports favorably thereon without amendment and recommends that the bill 

do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2 

Background and Need for the Legislation ............................................................. 2 

Hearings ................................................................................................................... 6 

Committee Consideration ........................................................................................ 6 

Committee Votes ...................................................................................................... 6 

Committee Oversight Findings ............................................................................... 10 

New Budget Authority and Tax Expenditures ...................................................... 11 

Congressional Budget Office Cost Estimate .......................................................... 11 

Performance Goals and Objectives ......................................................................... 12 

Constitutional Authority Statement ...................................................................... 12 

Advisory on Earmarks ............................................................................................. 12 

Section-by-Section Analysis .................................................................................... 12 

Agency Views ........................................................................................................... 13 

Changes in Existing Law Made by the Bill, as Reported ..................................... 17 

Minority Views ......................................................................................................... 19 


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1 Jean R. Sternlight, Creeping Mandatory Arbitration: Is it Just?, 57 STAN. L. REV. 1631, 1635 

(Apr. 2005). 2 9 U.S.C. § 1 et seq. 3See H.R. Rep. No. 96, 68th Cong., 1st Sess., 1 (1924). 4See Matthew Parrott, Is Compulsory Court-Annexed Medical Malpractice Arbitration Constitutional? How the Debate Reflects a Trend Towards Compulsion in Alternative Dispute Resolution, 75 FORDHAM L. REV. 2685, 2692. (Apr. 2007). 5Preston v. Ferrer, 128 S. Ct. 978, 987 (2008) (‘‘When parties agree to arbitrate all questions 

arising under a contract, the [Federal Arbitration Act] supersedes state laws . . .’’). 6See, e.g., Allied-Bruce Terminix Companies, Inc. v. Dobson, 513 U.S. 265 (1995); Gilmer v. 

Interstate/Johnson Lane Corp., 500 U.S. 20 (1991). 7See, e.g., Ann E. Krasuski, Comment, Mandatory Arbitration Agreements Do Not Belong in 

Nursing Home Contracts with Residents, 8 DEPAUL J. HEALTH CARE L. 263, 267 (2004); Harry 

Stoffer, Ban is ‘‘Bittersweet’’ for 2 Dealers; Survivors of Mandatory Binding Arbitration are 

Happy That Colleagues Will Be Spared Ordeal, AUTOMOTIVE NEWS, Jan. 27, 2003, at 14i. (‘‘Arbitration can be a good thing, . . . [but it’s] the ‘mandatory’ and the ‘binding,’ hanging together 

that make it objectionable.’’) 

PURPOSE AND SUMMARY

H.R. 6126 amends the Federal Arbitration Act to make unenforceable any agreement to arbitrate a dispute arising out of a contract between a long-term care facility and a resident, if the agreement was made before the dispute arose. 

BACKGROUND AND NEED FOR THE LEGISLATION

Arbitration has been used as a means of dispute resolution for 

thousands of years.1 It may offer benefits over the traditional litigation process. For example, the agreed upon arbitration process 

can offer the parties flexibility in the discovery process and the 

scheduling of the hearing. Further, when the subject matter of a 

dispute is highly technical, the parties to that dispute may choose 

an arbitrator with relevant expertise in the area. Because the arbitrator does not need to learn a new subject area, the arbitration 

hearing may be held sooner than a trial in court. Additionally, because there are less avenues to appeal or delay an arbitration decision, a party to the dispute can enforce a decision much quicker. 

Thus, the entire arbitration process can result in a swifter and, 

therefore, less costly resolution than traditional litigation in the 

courts. 

On February 12, 1925, Congress codified the use of arbitration 

through the Federal Arbitration Act.2 Title 9 was adopted as a 

means to put arbitration agreements on the same footing as other 

contracts, and as a way to avoid the sometimes costly and time 

consuming litigation process.3 Arbitration law establishes alternative dispute resolution procedures for certain types of disputes 

with an eye towards helping parties who so desire keep those disputes out of court, thereby facilitating efficient resolution.4 The Act 

supersedes all State laws in conflict with the Act.5 In order to encourage the use of arbitration, Title 9 provides a strong presumption that courts will enforce arbitration decisions. The grounds for 

seeking judicial review of arbitration determinations are limited, 

and seldom have parties been successful in overturning such determinations. The Supreme Court has upheld arbitration clauses in a 

wide array of contracts by recognizing Congress’ expansive powers 

under the Commerce Clause.6

Notwithstanding the benefits arbitration can provide to the parties of a dispute, a party with overwhelming negotiating leverage 

can unfairly advantage itself by imposing arbitration clauses as a 

condition of doing business.7 For example, in a business-consumer 


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8See Ting v. AT&T, 319 F.3d 1126, 1134 (9th Cir. 2003). 9See Credit Card Practices: Fees, Interest Rates, and Grace Periods: Hearing Before the 

Subcomm. on Investigations of the S. Comm. on Homeland Sec. and Governmental Affairs, 110th 

Cong. (2007) (prepared statement of Alys Cohen, Staff Attorney, National Consumer Law Center). 10See Krasuski, 8 DEPAUL J. HEALTH CARE L. at 268 n.41. 11See Cyrus Dugger and Jordan Fogal, Why an Ultra-Conservative Texas Grandmother Hates 

the GOP, May 15, 2007. Available at http://www.alternet.org/rights/51885. 12 Edward S. O’Neal and Daniel R. Solin, Mandatory Arbitration of Securities Disputes: A Statistical Analysis of How Claimants Fare, June 2007. A copy of the report is available at http:// 

www.slcg.com. 13See Circuit City v. Adams, 532 U.S. 105, 109–110, 113 (2001). 14See Nagrampa v. Mailcoups, Inc., 469 F.3d 1257 (9th Cir. 2006); Indep. Ass’n of Mailbox 

Ctr. Owners, Inc. v. Superior Court of San Diego County, 133 Cal. App. 4th 396 (2005). 15 Critics of arbitration label it ‘‘mandatory,’’ ‘‘compelled,’’ or even ‘‘cram down’’ arbitration. 

See, e.g., Carrie Menkel-Meadow, Do the ‘‘Haves’’ Come Out Ahead in Alternative Judicial Systems?: Repeat Players in ADR, 15 OHIO ST. J. ON DISP. RESOL. 19, 39 (1999); David S. Schwartz, 

Enforcing Small Print to Protect Big Business: Employee and Consumer Rights Claims in an 

Age of Compelled Arbitration, 1997 WIS. L. REV. 33; Jean R. Sternlight, Panacea or Corporate 

Tool?: Debunking the Supreme Court’s Preference for Binding Arbitration, 74 WASH. U. L.Q. 637, 

638 (1996). In contrast, proponents of arbitration suggest ‘‘mandatory’’ is unfair because consumers always have the option to refuse the services or products connected to binding arbitration. See, e.g., Elizabeth Hill, Due Process at Low Cost: An Empirical Study of Employment Arbitration Under the Auspices of the American Arbitration Association, 18 OHIO ST. J. ON DI SP. RESOL. 777, 780 (2003); Stephen J. Ware, Consumer Arbitration as Exceptional Consumer Law 

(With a Contractualist Reply to Carrington & Haagen), 29 MCGEORGE L. REV. 195, 201 (1998) 

(‘‘The consumer is free to put the pen down without signing the form. There is no duress in 

the typical ‘adhesion’ contract. A consumer who contracts in such circumstances does so voluntarily.’’). 16During the passage of the Federal Arbitration Act, Congress did not even intend to allow 

individuals to be bound by arbitration agreements if the contracts were between parties of unequal bargaining power. Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 414 

(1967) (Black, J. dissenting) (citing Hearing on S. 4213 and S. 4214 Before the Subcomm. of 

the S. Comm. on the Judiciary, 67th Cong., 9–11 (1923)). 17These groups include the American Arbitration Association, the National Arbitration 

Forum, and JAMS, which set their own procedures, contract with agencies and companies to 

arbitrate future disputes, and provide arbitrators and panels to hear disputes. 

relationship, the business can impose a mandatory arbitration 

clause on the consumer, who likely is not in a strong negotiating 

position. 

Businesses have imposed these clauses in a variety of standardform consumer contracts, such as through inserts with a billing 

statement,8 in credit card agreements,9 in long-term care admission agreements,10 and in contracts to purchase a house.11 Virtually all securities firms require investors to agree to arbitration.12 An employer may impose an arbitration clause on its employees by inserting it in its employee handbooks or by including 

it in its employment applications.13 Similarly, franchisors may require disputes to be resolved through arbitration by including arbitration clauses in their franchise agreements.14

If an individual even becomes aware of and understands the 

mandatory arbitration clause within the contract, he or she may reject the clause. However, the business usually then severs the current or anticipated relationship: a credit card company may cancel 

the consumer’s credit card; a nursing home may not admit the prospective resident; or the employer may fire the employee. Thus, individuals have little practical choice but to accept a mandated arbitration clause. By imposing on consumers, employees, and 

franchisees contracts on a ‘‘take-it-or-leave-it’’ basis,15 businesses 

and employers are bypassing the congenial nature of a fair and voluntary alternative dispute resolution technique that Congress intended.16

Because arbitration avoids the public court system in favor of a 

private industry of arbitration groups,17 individuals lose some of 

the benefits and constitutional rights associated with traditional 


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18 Unfortunately, proponents of pre-dispute mandatory arbitration may view these losses as 

necessary to minimize frivolous lawsuits. See David Sherwyn, Arbitration of Employment-Discrimination Lawsuits: Legalities, Practicalities, and Realities, CORNELL HOTEL & REST. ADMIN. Q. (Dec. 2002). 19 Arbitration clauses often impose high costs on consumers such as requiring travel to a distant forum or selection of a high-fee arbitrator, possible expenses which a plaintiff filing in a 

local court would not have to incur. See Lisa B. Bingham, Control over Dispute-System Design 

and Mandatory Commercial Arbitration, LAW & CONTEMP. PROBS., Winter/Spring 2004, 221. 

Nonetheless, proponents of pre-dispute mandatory arbitration contend that arbitration keeps 

costs lower for the parties, although businesses alone are the likely recipients of those savings. 

See http://www.arbitrationfaq.com/. 20See Katherine Palm, Note, Arbitration Clauses in Nursing Home Admission Agreements: 

Framing the Debate, 14 ELDER L.J. 453, 478 n.172 (2006). 21See Ziva Branstetter, Nursing Home Policy Challenged, TULSA WORLD, March 4, 2002, at 

1 (Oklahoma nursing home’s arbitration clause requires residents to travel to New Mexico at their 

own expense for arbitration proceedings). 22See id. 23The lower probability of victory and legal fees may discourage some attorneys from representing individuals in arbitration proceedings. See Donna Harris, Hudson: Arbitration defuses 

lawsuits; We can work it out—or not, AUTOMOTIVE NEWS, Feb. 6, 2006, at 56. (‘‘arbitration provisions in consumer contracts keep some plaintiffs’ lawyers at bay.’’). See also Charles L. Knapp, 

Taking Contracts Private: The Quiet Revolution in Contract Law, 71 FORDHAM L. REV. 761, 783– 

784 (2002). 24 Arbitration clauses may bar individuals from joining with others to form a class action, 

which has been a means by which plaintiffs have been able to pool resources to spread out the 

costs in time, attorney fees, and expenses. See Jean R. Sternlight, As Mandatory Binding Arbitration Meets the Class Action, Will the Class Action Survive?, 42 WM. & MARY L. REV. 1 (2000). 

A recent study concludes that the increase in mandatory binding arbitration clauses in consumer contracts is part of a broader initiative by businesses to limit class action litigation. Theodore Eisenberg, et al, Arbitration’s Summer Soldiers: An Empirical Study of Arbitration Clauses 

in Consumer and Nonconsumer Contracts, 41 U. MICH. J.L. REFORM 871, 895 (2008). 25 Arbitration has introduced the ‘‘repeat provider’’ phenomenon. Advocates posit that arbitration organizations favor ruling on behalf of businesses because of the financial incentive to ensure that businesses are pleased with the results of the arbitration and thus hire the arbitration 

organization repeatedly. See Carrie Menkel-Meadow, Do the ‘‘Haves’’ Come Out Ahead in Alternative Judicial Systems?: Repeat Players in ADR, 15 OHIO ST. J. ON DISP. RESOL. 19, 35–37 

(1999). See also Stephen Landsman, ADR and the Cost of Compulsion, 57 STAN. L. REV. 1593, 

1614–1615 (Apr. 2005). 26See Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 89–92 (2000) (where court held 

that a right guaranteed by the Truth in Lending Act was prevented by an adhesion arbitration 

clause). See also Garrett v. Circuit City Stores, Inc., 449 F.3d 672, 677 (5th Cir. 2006) (where 

court held that USERRA does not preempt the terms of an employment agreement containing 

an arbitration clause). 27Linda J. Demaine and Deborah R. Hensler, ‘‘Volunteering’’ to Arbitrate Through Predispute 

Arbitration Clauses: The Average Consumer’s Experience, LAW & CONTEMP. PROBS., Winter/ 

Spring 2004, 55. ‘‘Important’’ consumer transactions include automobile purchases, telephone 

services, and health care coverages. 28See Ting, 319 F.3d at 1134. 29See Hill v. Gateway 2000, Inc., 105 F.3d 1147 (7th Cir. 1997). 30See Marsh v. First USA Bank, 103 F. Supp. 2d 909, 916–918 (N.D. Tex. 2000). 31See Tinder v. Pinker Security, 305 F.3d 728, 730–733 (7th Cir. 2002). 32See National Consumer Law Center Inc., New Trap Door for Consumers: Card Issuers Use 

Rubber-Stamp Arbitration to Rush Debts into Default Judgments, Feb. 17, 2005. Available at 

http://www.consumerlaw.org/initiatives/model/content/ArbitrationNAF.pdf. Also see The Arbitration Trap: How Credit Card Companies Ensnare Consumers, Public Citizen, September 2007. 

Available at http://www.citizen.org/documents/Finallwcover.pdf. 

litigation.18 These benefits and rights include lower initial financial 

hurdles,19 pretrial discovery,20 formal civil procedure rules,21 proximity to the resolution forum,22 access to counsel,23 class action options,24 and fairness.25 Mandatory binding arbitration clauses may 

even negate the protection of some Federal statutes.26

Mandatory arbitration clauses, especially in consumer contracts, 

are becoming ubiquitous. Approximately one-third of important 

consumer transactions may be covered by arbitration clauses.27

Some consumers have agreed to mandatory arbitration clauses simply by receiving them in envelope inserts 28 and in product boxes.29

A consumer may even be bound by an arbitration clause he or she 

may not have ever received.30 An employee may be similarly 

bound.31 Some companies have utilized mandatory binding arbitration to obtain default judgments against consumers.32


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33See Russel Myles and Kelly Reese, Arbitration: Avoiding the Runaway Jury, 23 AM. J. TRIAL

ADVOC. 129, 141 (1999). 34The secrecy may also detract from the development of law, see Richard M. Alderman, PreDispute Mandatory Arbitration in Consumer Contracts: A Call for Reform, 38 HOUS. L. REV. 

1237, 1246–49 (2001), or be incompatible with democracy, see Richard C. Reuben, Democracy 

and Dispute Resolution: The Problem of Arbitration, 67 LAW & CONTEMP. PROBS. 279, 298–303 

(2004). 35From 1999 until February 2005, the Centers for Medicare and Medicaid Services—the Federal agency which oversees compliance with Federal nursing home standards—cited 15.5% to 

29.3% of nursing homes for actual harm or immediate jeopardy to their residents. U.S Gov. Accountability Off., NURSING HOMES: DESPITE INCREASED OVERSIGHT, CHALLENGES REMAIN IN ENSURING HIGH-QUALITY CARE AND RESIDENT SAFETY, GAO-06-117 (Dec. 2005). The most recent 

report reveals that about 1 in 5 nursing homes have serious deficiencies. U.S Gov. Accountability Off., NURSING HOMES: FEDERAL MONITORING SURVEYS DEMONSTRATE CONTINUED UNDERSTATEMENT OF SERIOUS CARE PROBLEMS AND CMS OVERSIGHT WEAKNESSES, GAO-08-517 (May 

2008). Although this information is generally available, these numbers reflect responses to sporadic surveys, which likely do not include all relevant information. 36See Krasuski, at 300 nn.262–263. 37See Denese A. Vlosky, ‘‘Say-so’’ as a Predictor of Nursing Home Readiness, 93 J. FAM. CONSUMER SCI. 59 (2001). 38See Howell v. NHC Healthcare-Fort Sanders, 109 S.W.3d 731 (Tenn Ct. App. 2003); Raiteri 

ex rel Cox v. NHC Healthcare/Knoxville, Inc., No. E2003-00068-COA-R9-CV, 2003 WL 

23094413, at 2 (Tenn. Ct. App. Dec. 30, 2003). See also Robert Hornstein, The Fiction of Freedom of Contract—Nursing Home Admission Contract Arbitration Agreements: A Primer on Preserving the Right of Access to Court Under Florida Law, 16 ST. THOMAS L. REV. 319, 320 (2003); 

Maureen Armour, A Nursing Home’s Good Faith Duty to Care: Redefining a Fragile Relationship 

Using the Law of Contract, 39 ST. LOUIS U. L.J. 217, 226 n.37 (1994). 39See Romano ex rel. Romano v. Manor Care, Inc., 861 So.2d 59, 61 (Fla. App. 2003), reh’g 

denied, Manor Care, Inc. v. Romano, 874 So.2d 1192 (Fla. 2004) (where even the nursing home 

administrator did not understand the meaning of the arbitration clause). 

Another concern is that arbitration is conducted in a secretive 

setting in which no public records are produced.33 The secrecy of 

arbitration may keep important information out of the view of individuals who would use it to make informed choices based on safety 

records.34 For example, prospective residents of long-term care facilities would benefit from knowing the history of safe treatment of 

residents at the facilities they are considering.35 Arbitration enables the long-term care industry to keep more of this information 

secret, avoiding media exposure and hampering government oversight.36

Although informed consumers might theoretically be expected to 

reject one-sided arbitration clauses by opting for long-term care at 

facilities that do not impose them, residents and their families 

often do not have much time, as a practical matter, to conduct a 

thorough examination to compare contracts at each facility in their 

vicinity.37 The resident’s and his or her family’s focus is understandably on the quality and assortment of provided services offered. When residents are being admitted, they and their families 

are typically under a lot of stress, and few are in a state of mind 

to give much thought to the fine print in the admission materials.38

If a resident even becomes aware of the mandatory arbitration 

clause, he or she may not understand the clause.39 And even the 

relatively few who might see it and understand it are forced to accept it anyway or be denied admission into the long-term care facility. 

In these conditions, arbitration is no longer voluntary; it is mandatory. Individuals are left with little choice but to accept arbitration to resolve future disputes. 

In fact, the controversy surrounding arbitrating personal injury 

disputes involving residents and long-term care facilities has 

caused some arbitration providers to refuse to arbitrate such disVerDate Aug 31 2005 01:12 Sep 29, 2008 Jkt 069006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6601 E:\HR\OC\HR894.XXX HR894

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40See ‘‘Healthcare Due Process Protocol,’’ AMERICAN ARBITRATION ASSOCIATION/AMERICAN BAR

ASSOCIATION/AMERICAN MEDICAL ASSOCIATION COMMISSION ON HEALTHCARE DISPUTE RESOLUTION, FINAL REPORT, JULY 27, 1998, available at http://www.adr.org/sp.asp?id=28633; Elise 

Dunitz Brennan, Commentary, Board Modification to the Rules of the Alternative Dispute Resolution Service of American Health Lawyers Association, HEALTH LAWYERS NEWS, Jan. 2004, at 

21–22. 41The Arbitration Fairness Act of 2007: Hearing on H.R. 3010 Before the Subcomm. on Comm. 

and Admin. Law of the H. Comm. on the Judiciary, 110th Cong. (2007) (response by Richard 

Naimark, Senior Vice President of the American Arbitration Association, to a question posed by 

Rep. Linda T. Sa ́nchez, on why AAA no longer arbitrates health care disputes). See also Joelle 

Babula, Valley Health Care: Group Won’t Arbitrate Medical Cases, LAS VEGAS REV. J., Aug. 7, 

2003, at 1-B. 

putes unless ordered by a court to do so.40 These arbitration providers include the American Arbitration Association and the American Health Lawyers Association.41

H.R. 6126 amends the Federal Arbitration Act to make mandatory arbitration clauses in contracts between long-term care facilities and residents except when they are agreed to after the dispute 

involved has arisen. H.R. 6126 simply gives back to residents and 

their families their legal options on how to resolve disputes should 

they arise. 

HEARINGS

The Committee on the Judiciary Committee’s Subcommittee on 

Commercial and Administrative Law held a hearing on H.R. 6126 

on June 10, 2008. Testimony was received from William J. Hall, 

MD, who appeared on behalf of AARP; Linda Stewart, RN, a nurse 

from Texas; Gavin J. Gadberry, Esq., an attorney with Underwood, 

Wilson, Berry, Stein and Johnson, PC, who appeared on behalf of 

the American Health Care Association and the National Center for 

Assisted Living; and Ken Connor, an attorney with Wilkes & 

McHugh, P.A. 

COMMITTEE CONSIDERATION

On June 15, 2008, the Subcommittee on Commercial and Administrative Law met in open session and ordered the bill H.R. 6126 

favorably reported, without amendment, by a vote of 5 to 4, a 

quorum being present. On July 30, 2008, the Committee met in 

open session and ordered the bill H.R. 6126 favorably reported 

without amendment, by a rollcall vote of 17 to 10, a quorum being 

present. 

COMMITTEE VOTES

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the following 

rollcall votes occurred during the Committee’s consideration of H.R. 

6126: 

1. An amendment offered by Mr. Feeney to cap and limit attorneys fees paid to attorneys representing plaintiffs. The amendment 

would also require the Comptroller General to conduct a study of 

the average hourly fees paid to plaintiffs’ lead counsel in all class 

action cases. The amendment failed by a vote of 11 to 15. 


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ROLLCALL NO. 1 

Ayes Nays Present 

Mr. Conyers, Jr., Chairman ............................................................................... X 

Mr. Berman .......................................................................................................

Mr. Boucher .......................................................................................................

Mr. Nadler ......................................................................................................... X 

Mr. Scott ........................................................................................................... X 

Mr. Watt ............................................................................................................ X 

Ms. Lofgren .......................................................................................................

Ms. Jackson Lee ................................................................................................

Ms. Waters ........................................................................................................

Mr. Delahunt .....................................................................................................

Mr. Wexler ......................................................................................................... X 

Ms. Sa ́nchez ...................................................................................................... X 

Mr. Cohen .......................................................................................................... X 

Mr. Johnson ....................................................................................................... X 

Ms. Sutton ......................................................................................................... X 

Mr. Gutierrez .....................................................................................................

Mr. Sherman ..................................................................................................... X 

Ms. Baldwin ...................................................................................................... X 

Mr. Weiner ......................................................................................................... X 

Mr. Schiff .......................................................................................................... X 

Mr. Davis ...........................................................................................................

Ms. Wasserman Schultz .................................................................................... X 

Mr. Ellison ......................................................................................................... X 

Mr. Smith, Ranking Member ............................................................................. X 

Mr. Sensenbrenner, Jr. ......................................................................................

Mr. Coble ........................................................................................................... X 

Mr. Gallegly ....................................................................................................... X 

Mr. Goodlatte ....................................................................................................

Mr. Chabot ........................................................................................................

Mr. Lungren .......................................................................................................

Mr. Cannon ....................................................................................................... X 

Mr. Keller ...........................................................................................................

Mr. Issa ............................................................................................................. X 

Mr. Pence ..........................................................................................................

Mr. Forbes ......................................................................................................... X 

Mr. King ............................................................................................................ X 

Mr. Feeney ......................................................................................................... X 

Mr. Franks ......................................................................................................... X 

Mr. Gohmert ...................................................................................................... X 

Mr. Jordan ......................................................................................................... X 

Total ................................................................................................ 11 15 

2. An amendment offered by Mr. Cannon to exclude from the Act 

pre-dispute arbitration agreements which do not condition admission based on such agreements, provide at least a 30-day opt-out 

provision of such agreements, and preserve state laws regulating 

such agreements. The amendment failed by a vote of 9 to 14. 

ROLLCALL NO. 2 

Ayes Nays Present 

Mr. Conyers, Jr., Chairman ............................................................................... X 

Mr. Berman .......................................................................................................

Mr. Boucher .......................................................................................................

Mr. Nadler ......................................................................................................... X 

Mr. Scott ........................................................................................................... X 

Mr. Watt ............................................................................................................ X 

Ms. Lofgren .......................................................................................................

Ms. Jackson Lee ................................................................................................ X 

Ms. Waters ........................................................................................................

Mr. Delahunt .....................................................................................................


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ROLLCALL NO. 2—Continued 

Ayes Nays Present 

Mr. Wexler ......................................................................................................... X 

Ms. Sa ́nchez ...................................................................................................... X 

Mr. Cohen ..........................................................................................................

Mr. Johnson ....................................................................................................... X 

Ms. Sutton ......................................................................................................... X 

Mr. Gutierrez .....................................................................................................

Mr. Sherman ..................................................................................................... X 

Ms. Baldwin ...................................................................................................... X 

Mr. Weiner ......................................................................................................... X 

Mr. Schiff .......................................................................................................... X 

Mr. Davis ...........................................................................................................

Ms. Wasserman Schultz .................................................................................... X 

Mr. Ellison .........................................................................................................

Mr. Smith, Ranking Member ............................................................................. X 

Mr. Sensenbrenner, Jr. ......................................................................................

Mr. Coble ........................................................................................................... X 

Mr. Gallegly ....................................................................................................... X 

Mr. Goodlatte ....................................................................................................

Mr. Chabot ........................................................................................................

Mr. Lungren .......................................................................................................

Mr. Cannon ....................................................................................................... X 

Mr. Keller ...........................................................................................................

Mr. Issa .............................................................................................................

Mr. Pence ..........................................................................................................

Mr. Forbes ......................................................................................................... X 

Mr. King ............................................................................................................ X 

Mr. Feeney ......................................................................................................... X 

Mr. Franks .........................................................................................................

Mr. Gohmert ...................................................................................................... X 

Mr. Jordan ......................................................................................................... X 

Total ................................................................................................ 9 14 

3. An amendment offered by Mr. Cannon to exclude from the Act 

any pre-dispute arbitration agreements which cover services provided essentially by medical and health-related employees of the 

long-term care facility. The amendment failed by a vote of 10 to 14. 

ROLLCALL NO. 3 

Ayes Nays Present 

Mr. Conyers, Jr., Chairman ............................................................................... X 

Mr. Berman ....................................................................................................... X 

Mr. Boucher .......................................................................................................

Mr. Nadler ......................................................................................................... X 

Mr. Scott ........................................................................................................... X 

Mr. Watt ............................................................................................................ X 

Ms. Lofgren .......................................................................................................

Ms. Jackson Lee ................................................................................................

Ms. Waters ........................................................................................................

Mr. Delahunt .....................................................................................................

Mr. Wexler .........................................................................................................

Ms. Sa ́nchez ...................................................................................................... X 

Mr. Cohen .......................................................................................................... X 

Mr. Johnson ....................................................................................................... X 

Ms. Sutton ......................................................................................................... X 

Mr. Gutierrez .....................................................................................................

Mr. Sherman ..................................................................................................... X 

Ms. Baldwin ...................................................................................................... X 

Mr. Weiner ......................................................................................................... X 

Mr. Schiff .......................................................................................................... X 

Mr. Davis ...........................................................................................................

Ms. Wasserman Schultz .................................................................................... X 


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ROLLCALL NO. 3—Continued 

Ayes Nays Present 

Mr. Ellison .........................................................................................................

Mr. Smith, Ranking Member ............................................................................. X 

Mr. Sensenbrenner, Jr. ......................................................................................

Mr. Coble ........................................................................................................... X 

Mr. Gallegly ....................................................................................................... X 

Mr. Goodlatte ....................................................................................................

Mr. Chabot ........................................................................................................ X 

Mr. Lungren .......................................................................................................

Mr. Cannon ....................................................................................................... X 

Mr. Keller ...........................................................................................................

Mr. Issa .............................................................................................................

Mr. Pence ..........................................................................................................

Mr. Forbes ......................................................................................................... X 

Mr. King ............................................................................................................ X 

Mr. Feeney ......................................................................................................... X 

Mr. Franks .........................................................................................................

Mr. Gohmert ...................................................................................................... X 

Mr. Jordan ......................................................................................................... X 

Total ................................................................................................ 10 14 

4. A vote on the question of the motion to report H.R. 6126 favorably was approved 17 to 4. 

ROLLCALL NO. 4 

Ayes Nays Present 

Mr. Conyers, Jr., Chairman ............................................................................... X 

Mr. Berman .......................................................................................................

Mr. Boucher ....................................................................................................... X 

Mr. Nadler ......................................................................................................... X 

Mr. Scott ........................................................................................................... X 

Mr. Watt ............................................................................................................ X 

Ms. Lofgren ....................................................................................................... X 

Ms. Jackson Lee ................................................................................................ X 

Ms. Waters ........................................................................................................ X 

Mr. Delahunt .....................................................................................................

Mr. Wexler ......................................................................................................... X 

Ms. Sa ́nchez ...................................................................................................... X 

Mr. Cohen ..........................................................................................................

Mr. Johnson .......................................................................................................

Ms. Sutton ......................................................................................................... X 

Mr. Gutierrez .....................................................................................................

Mr. Sherman ..................................................................................................... X 

Ms. Baldwin ...................................................................................................... X 

Mr. Weiner ......................................................................................................... X 

Mr. Schiff .......................................................................................................... X 

Mr. Davis ...........................................................................................................

Ms. Wasserman Schultz .................................................................................... X 

Mr. Ellison ......................................................................................................... X 

Mr. Smith, Ranking Member ............................................................................. X 

Mr. Sensenbrenner, Jr. ...................................................................................... X 

Mr. Coble ........................................................................................................... X 

Mr. Gallegly .......................................................................................................

Mr. Goodlatte ....................................................................................................

Mr. Chabot ........................................................................................................

Mr. Lungren .......................................................................................................

Mr. Cannon .......................................................................................................

Mr. Keller ........................................................................................................... X 

Mr. Issa .............................................................................................................

Mr. Pence ..........................................................................................................

Mr. Forbes .........................................................................................................

Mr. King ............................................................................................................


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ROLLCALL NO. 4—Continued 

Ayes Nays Present 

Mr. Feeney .........................................................................................................

Mr. Franks .........................................................................................................

Mr. Gohmert ......................................................................................................

Mr. Jordan .........................................................................................................

Total ................................................................................................ 17 4 

5. Noting the apparent absence of a quorum, the Chair called for 

a quorum. The vote to report H.R. 6126 favorably was retaken, and 

was approved 17 to 10. 

ROLLCALL NO. 5 

Ayes Nays Present 

Mr. Conyers, Jr., Chairman ............................................................................... X 

Mr. Berman .......................................................................................................

Mr. Boucher .......................................................................................................

Mr. Nadler ......................................................................................................... X 

Mr. Scott ........................................................................................................... X 

Mr. Watt ............................................................................................................

Ms. Lofgren ....................................................................................................... X 

Ms. Jackson Lee ................................................................................................ X 

Ms. Waters ........................................................................................................ X 

Mr. Delahunt ..................................................................................................... X 

Mr. Wexler ......................................................................................................... X 

Ms. Sa ́nchez ...................................................................................................... X 

Mr. Cohen ..........................................................................................................

Mr. Johnson ....................................................................................................... X 

Ms. Sutton ......................................................................................................... X 

Mr. Gutierrez .....................................................................................................

Mr. Sherman ..................................................................................................... X 

Ms. Baldwin ...................................................................................................... X 

Mr. Weiner ......................................................................................................... X 

Mr. Schiff .......................................................................................................... X 

Mr. Davis ...........................................................................................................

Ms. Wasserman Schultz .................................................................................... X 

Mr. Ellison ......................................................................................................... X 

Mr. Smith, Ranking Member ............................................................................. X 

Mr. Sensenbrenner, Jr. ...................................................................................... X 

Mr. Coble ........................................................................................................... X 

Mr. Gallegly .......................................................................................................

Mr. Goodlatte .................................................................................................... X 

Mr. Chabot ........................................................................................................

Mr. Lungren ....................................................................................................... X 

Mr. Cannon .......................................................................................................

Mr. Keller ........................................................................................................... X 

Mr. Issa .............................................................................................................

Mr. Pence ..........................................................................................................

Mr. Forbes ......................................................................................................... X 

Mr. King ............................................................................................................ X 

Mr. Feeney ......................................................................................................... X 

Mr. Franks .........................................................................................................

Mr. Gohmert ......................................................................................................

Mr. Jordan ......................................................................................................... X 

Total ................................................................................................ 17 10 

COMMITTEE OVERSIGHT FINDINGS

In compliance with clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activiVerDate Aug 31 2005 01:12 Sep 29, 2008 Jkt 069006 PO 00000 Frm 00010 Fmt 6659 Sfmt 6601 E:\HR\OC\HR894.XXX HR894

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ties under clause 2(b)(1) of rule X of the Rules of the House of Representatives, are incorporated in the descriptive portions of this report. 

NEW BUDGET AUTHORITY AND TAX EXPENDITURES

Clause 3(c)(2) of rule XIII of the Rules of the House of Representatives is inapplicable because this legislation does not provide new 

budgetary authority or increased tax expenditures. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, the Committee sets forth, with respect to 

the bill, H.R. 6126, the following estimate and comparison prepared 

by the Director of the Congressional Budget Office under section 

402 of the Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, September 2, 2008. 

Hon. JOHN CONYERS, Jr., Chairman, 

Committee on the Judiciary, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 6126, the Fairness in 

Nursing Home Arbitration Act of 2008. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Leigh Angres, who can 

be reached at 226–2860. 

Sincerely, 

PETER R. ORSZAG, 

DIRECTOR. 

Enclosure 

cc: Honorable Lamar S. Smith. 

Ranking Member 

H.R. 6126—Fairness in Nursing Home Arbitration Act of 2008. 

H.R. 6126 would make certain pre-dispute arbitration agreements between the operators of long-term care facilities and their 

residents invalid or unenforceable. In a pre-dispute arbitration 

agreement, the parties agree to arbitrate a potential dispute rather 

than seek redress through the courts. The bill would apply to 

agreements entered into or modified on or after the date of the 

bill’s enactment. Under current law, the operators of long-term care 

facilities can include clauses in contracts with residents that provide for mandatory arbitration if a dispute should arise. 

Under the bill, CBO expects that the majority of disputes that 

could arise between a resident and a facility operator would be litigated in State courts and, therefore, would not substantially affect 

the caseload of the Federal court system. Cases challenging the 

nullification of a particular arbitration agreement would be addressed in a Federal court, but CBO expects that any such cases 

would have an insignificant effect on the overall workload of the 

courts. Therefore, CBO estimates that implementing H.R. 6126 


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would have no significant cost over the next 5 years. Enacting the 

bill would have no effect on direct spending or revenues. 

By restricting the provisions that could be included in contracts 

between long-term care facilities and residents of such facilities (or 

their representatives), H.R. 6126 would impose an intergovernmental and private-sector mandate as defined in the Unfunded 

Mandates Reform Act (UMRA). Based on information from industry sources, CBO estimates that the direct cost to comply with the 

mandate to State, local, and tribal governments and the private 

sector would fall below the annual thresholds established in UMRA 

for intergovernmental and private-sector mandates ($68 million 

and $136 million, respectively, in 2008, adjusted annually for inflation). 

The CBO staff contacts for this estimate are Leigh Angres (for 

Federal costs), who can be reached at 226–2860, Melissa Merrell 

(for the State and local impact), who can be reached at 225–3220, 

and Paige Piper/Bach (for the private-sector impact), who can be 

reached at 226–2940. This estimate was approved by Peter H. 

Fontaine, Assistant Director for Budget Analysis. 

PERFORMANCE GOALS AND OBJECTIVES

The Committee states that pursuant to clause 3(c)(4) of rule XIII 

of the Rules of the House of Representatives, H.R. 6126 amends 

the Federal Arbitration Act to make unenforceable agreements to 

arbitrate disputes arising out of a contract between a long-term 

care facility and a resident, if that agreement was made before the 

dispute arose. 

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee finds the authority for this legislation in article I, section 8 of the Constitution. 

ADVISORY ON EARMARKS

In accordance with clause 9 of rule XXI of the Rules of the House 

of Representatives, H.R. 6126 does not contain any congressional 

earmarks, limited tax benefits, or limited tariff benefits as defined 

in clause 9(d), 9(e), or 9(f) of Rule XXI. 

SECTION-BY-SECTION ANALYSIS

The following discussion describes the bill as reported by the 

Committee. 

Sec. 1. Short Title. Section 1 sets forth the short title of the bill 

as the ‘‘Fairness in Nursing Home Arbitration Act of 2008.’’ 

Sec. 2. Amendments. Section 2 amends the Federal Arbitration 

Act by adding a new section, Section 17, to the Act. Section 2 defines a ‘‘long-term care facility’’ to include any facility which is reimbursed for services by Medicare or Medicaid, or is an assisted 

living facility, or is an adult foster care facility, but excludes adult 

day care facilities. Section 2 also states that pre-dispute arbitration 

agreements between a long-term care facility and a resident of such 

a facility are invalid or unenforceable, whether they were entered 

into at any time during or after the admission process. 


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Sec. 3. Effective Date; Application of Amendments. Section 3 provides that the amendments made by this legislation will apply only 

to contracts made, amended, altered, modified, renewed, or extended on or after the enactment of this legislation. 

AGENCY VIEWS

A July 29, 2008 letter from the Department of Health and 

Human Services on H.R. 6126 is set forth below. In his letter Secretary Leavitt asserts incorrectly that H.R. 6126 would ‘‘deprive patients and providers of the opportunity to agree voluntarily to resolve their disputes through arbitration.’’ H.R. 6126 would only 

make unenforceable pre-dispute mandatory arbitration agreements. 


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A July 30, 2008 letter from the Office of Legislative Affairs of the 

Department of Justice on S. 2838, a similar but not identical bill 

to H.R. 6126, is set forth below. Principal Deputy Assistant Attorney General Nelson asserts incorrectly that the bill would provide 

‘‘a blanket prohibition against enforcing arbitration agreements in 

all situations.’’ H.R. 6126 would only make unenforceable pre-dispute mandatory arbitration agreements. 


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CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italics 

and existing law in which no change is proposed is shown in 

roman): 


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TITLE 9, UNITED STATES CODE 

* * * * * * * 

CHAPTER 1—GENERAL PROVISIONS 

Sec. 

1. ‘‘Maritime transactions’’ and ‘‘commerce’’ defined; exceptions to operation of title. 

* * * * * * * 

17. Validity and enforcement. 

* * * * * * * 

§ 17. Validity and enforceability 

(a) DEFINITIONS.—For purposes of this section: 

(1) LONG-TERM CARE FACILITY.—The term ‘‘long-term care 

facility’’ means— 

(A) any skilled nursing facility as defined in 1819(a) of 

the Social Security Act; 

(B) any nursing facility as defined in 1919(a) of the Social Security Act; or 

(C) a public facility, proprietary facility, or facility of 

a private nonprofit corporation that— 

(i) makes available to adult residents supportive 

services to assist the residents in carrying out activities 

such as bathing, dressing, eating, getting in and out of 

bed or chairs, walking, going outdoors, using the toilet, 

or obtaining or taking medication; and 

(ii) provides a dwelling place (which may contain 

a full kitchen and bathroom) for residents in order to 

deliver supportive services described in clause (i), that 

includes common rooms and other facilities appropriate for the provision of such services to residents of 

the facility; 

but excludes a facility, or portion of a facility, that either does 

not provide the services described in clause (i) or has as its primary purpose to educate or to treat substance abuse problems. 

(2) PRE-DISPUTE ARBITRATION AGREEMENT.—The term ‘‘predispute arbitration agreement’’ means any agreement to arbitrate a dispute that arises after such agreement is made. 

(b) INVALIDITY OF PRE-DISPUTE ARBITRATION AGREEMENTS.—A 

pre-dispute arbitration agreement between a long-term care facility 

and a resident of such facility (or person acting on behalf of such 

resident, including a person with financial responsibility for such 

resident) shall not be valid or specifically enforceable. 

(c) APPLICATION TO AGREEMENTS.—This section shall apply to 

any pre-dispute arbitration agreement between a long-term care facility and a resident of such facility (or a person acting on behalf 

of such a resident, including a person with financial responsibility 

for such resident), and shall apply to a pre-dispute arbitration 

agreement entered into either at any time during the admission 

process or at any time after the admission process. 

(d) APPLICATION OF FEDERAL LAW.—A determination as to 

whether this chapter applies to an arbitration agreement described 

in this section shall be determined under Federal law. Except as 

otherwise provided in this chapter, the validity or enforceability of 


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such agreement shall be determined by the court, rather than the 

arbitrator, irrespective of whether the party opposing arbitration 

challenges such agreement specifically or in conjunction with any 

other term of the contract containing such agreement. 

* * * * * * * 

MINORITY VIEWS

I. INTRODUCTION

Mandatory, pre-dispute arbitration in the nursing home and assisted living sectors grew out of run-away litigation abuse in the 

1990s. Hand in hand with tort reform, the use of mandatory arbitration effectively brought litigation costs back under control. As a 

result, service providers that might otherwise have been forced to 

raise fees for services or close their doors were able to continue to 

provide affordable services. Their sustained ability to do so is imperative as our country’s elderly and fixed-income population explodes, creating ever-higher demand for nursing home and assisted 

living services at sustainable costs. 

H.R. 6126 imprudently seeks to turn back the clock on arbitration practices in these sectors. It will render thousands upon thousands of arbitration agreements void and unenforceable, and it will 

prohibit the negotiation of such agreements in the future. No 

record has been established demonstrating that mandatory binding 

arbitration is unfair to nursing home and assisted living residents 

and their families. No record has been made that, if there is any 

unfairness, a solution cannot be found in reforming mandatory arbitration procedures or improving the voluntary arbitration system. 

And, perhaps most important, no record has been made demonstrating that the inexorable results of H.R. 6126 will not be abusive lawsuits, rising costs and closing facility doors. Those rising 

costs, moreover, surely will one day be placed at the door of the 

Medicare system, which already is destined for a fiscal crisis of epic 

proportions if it is not reformed. 

H.R. 6126 also is proposed precisely at the time that the key alternative to arbitration—the class action lawsuit—is under greater 

suspicion than ever. Some of the most prominent plaintiffs’ class 

action lawyers in the country stand convicted of massive fraud 

based on the purchase and use of fabricated evidence. There is 

strong evidence, moreover, that such abuse is standard class-action 

industry practice. At the same time, moreover, there is potent evidence that class action awards frequently produce only pittances 

for individual members of plaintiff classes, while their class action 

lawyers harvest from them millions upon millions of dollars in fees. 

Congress’ investigation of this scandal has just begun, and it 

should be concluded before we pass any legislation sacrificing arbitration to the interests of the plaintiffs trial bar. 

For all of these reasons, we strongly urge the rejection of H.R. 

6126. The bill will surely bring profits to the plaintiffs’ trial bar. 

It will surely harm, however, the nursing home and assisted living 

system and those who depend upon it for vital services. 


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1 Nathan Koppel, Nursing Homes, in Bid to Cut Costs, Prod Patients to Forego Lawsuits, Wall 

Street Journal, p. A1 (April 11, 2008) (‘‘Koppel, Nursing Homes’’). 2 Id. 

3See, e.g., AON Global, Long Term Care: 2008 General Liability and Professional Liability Actuarial Analysis at 4, 8 (May 12, 2008) (‘‘Long Term Care’’). 4Koppel, Nursing Homes. 5 Id. 

6 Id. 

II. BACKGROUND

A. Increased Use of Mandatory Binding Arbitration Clauses 

in Response to Exploding Nursing Home Tort Liability in 

the 1990s 

Arbitration is the classic means of alternative dispute resolution 

available to those wishing not to bring their disputes before federal 

or state courts. The Federal Arbitration Act, 9 U.S.C. § 1 et seq., is 

the principal federal law affecting arbitration. H.R. 6126 would 

amend the FAA. 

The thrust of the law, including federal law, has for some time 

been to encourage the use of arbitration and other alternative dispute resolution mechanisms that are speedier, less expensive and 

more flexible than litigation. In the landmark case of Southland v. 

Keating, 465 U.S. 1 (1984), the Supreme Court went so far as to 

declare that ‘‘[i]n enacting § 2 of the [Federal Arbitration] Act, Congress declared a national policy of favoring arbitration and withdrew the power of the states to require a judicial forum for the resolution of claims which the contracting parties agreed to resolve by 

arbitration.’’ Id. at 10 (emphasis added). 

H.R. 6126 flies in the face of this consistent and important federal policy. It is therefore imperative to consider whether there is 

any evidence compelling a departure from this policy in the nursing 

home and assisted living sectors. 

The stage for H.R. 6126 was set, first and foremost, by increases 

in tort liability in the nursing home sector in the 1990s. This trend 

may have been most pronounced in Florida, Texas and Arkansas. 

As the Wall Street Journal reported: 

The industry was alarmed in the late 1990s by a rash of huge 

jury awards. In one case, $83 million was awarded in the death 

of a Texas woman with infected bedsores; $95 million went to 

a California woman who fractured her hip and shoulder when 

she allegedly was dropped by nursing-home staff. Both awards 

were knocked down by the trial judges: the Texas judgment to 

$56 million, and the California award down to $3.6 million. 

But plaintiffs’ lawyers were newly drawn to nursing-home 

suits by the big awards.1

According to the plaintiffs’ lawyer in that same California case, 

‘‘Every joker and their brother got into the nursing-home area[.]’’ 2

In response to this trend, the nursing home sector increasingly 

turned to the use of mandatory binding arbitration clauses in the 

contracts they signed with residents or their families.3 In some 

states, these clauses were struck down by state courts.4 Often, they 

were struck down on the ground that they were signed under duress.5 Other times they were struck down as too unfavorable to 

plaintiffs or because they were not adequately explained when they 

were bargained for.6


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7 Id. 

8 Id. 

9 Id. 

10 Id.; see also Long Term Care at 4–6, 13–19, 23–25. 11Koppel, Nursing Home. 12 Id. 13 Id. 14 Id. 15 Id. 

In other states, however, the courts upheld the use of mandatory 

binding arbitration clauses.7 In Ohio, for example, a court upheld 

in 2007 an agreement with a mandatory binding arbitration clause 

that was entered into by ‘‘a woman who had entered a home from 

a hospital and was suffering bouts of confusion.’’ 8 Although the 

court considered the nursing home’s use of the clause ‘‘troubling,’’ 

and that the clause had been offered during ‘‘an extremely stressful 

time for elderly persons of diminished health,’’ it found the contract 

fair and upheld it.9

According to a 2007 study performed for the nursing home industry, the move to arbitration is beginning to curb awards effectively. 

As reported in the Wall Street Journal, the study found that ‘‘after 

years of rising, average payouts per claim began to edge down for 

nursing-home cases resolved in 2004 and 2005, in part due to the 

rise of arbitration and tort-reform measures.’’ 10 Looking to the future, the study estimates that ‘‘with legal fees included, homes’ average costs per claim will drop to about $146,000 for incidents that 

took place in 2006, from about $226,000 for 1999 incidents.’’ 11 According to one of the authors of the study, ‘‘we are seeing the elimination of large runaway awards’’ in a number of states.12

Two clear effects should result from these developments. First, 

the return to more reasonable awards will help assure that runaway awards do not force providers out of business. For example, 

Skilled Healthcare Group, Inc., a company operating 75 nursing 

homes in six states, filed for bankruptcy in 2001, in part because 

of a $6 million judgment against the company.13 The company survived bankruptcy, and by 2007 had ‘‘significantly reduced [its] liability exposure’’ through the use of arbitration clauses.14 According to the company’s general counsel, as a result of the company’s 

use of mandatory arbitration, it has found in virtually every case 

that it can come to a reasonable settlement, because both sides understand that ‘‘the possibility of a highly emotionally driven verdict 

is unlikely.’’ 15

Second, and in a similar way, arbitration in the same way helps 

companies to lower costs. This is, of course, beneficial to consumers, many of whom must sign up for long-term care at nursing 

homes. This also promises to be beneficial to the Medicare system, 

which often pays for nursing home services. The increased use of 

arbitration thus stands to benefit not only the family fisc, but the 

federal fisc, and with it every taxpayer. This is no small thing, considering the looming Medicare funding crisis fueled by exploding 

health care costs for an increasingly aging society. 

We acknowledge that there may be occasional cases in which the 

arbitration system may produce unsatisfactory results. Much the 

same can be said, however, of the court system. The question, 

therefore, is whether the arbitration system on the whole is functioning well, when compared to the litigation system. We also acknowledge that there will be cases in which a resident may suffer 


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16 It has been reported, for example, that in class action litigation over exploding tires and rollovers associated with the Ford Explorer, class members recovered only a $500 certificate towards the purchase of a new Ford Explorer or a $300 certificate towards the purchase of any 

other Ford, Mercury or Lincoln vehicle. Both certificates were good for just 12 months. The 

plaintiff class’s lawyers, meanwhile, obtained $25 million in fees. Similarly, in a class action consumer suit against Sears over charges for wheel alignments, the individual consumers recovered 

less than $6.50 each, while their class action lawyers recovered $1.1 million in fees. Those fees 

represented 99.8 percent of the total settlement of $1,102,402. 17Statement of Gavin Gadberry on behalf of the American Health Care Association and National Center for Assisted Living. 

illness, injury or, in the extreme case, death, from poor quality 

nursing home or assisted living care, and in which that resident 

may not have fully appreciated that his or her contract would prevent the case from going to a jury trial. But the question remains 

the same—does the arbitration system nevertheless generally 

produce satisfactory results, when compared to litigation? 

In the evidence brought to the Committee in hearings on H.R. 

6126, we saw no proof that the arbitration system is commonly failing. Accordingly, far more important than protecting against the 

occasional arbitration misfire or a small subset of patients’ access 

to jury trials is the need to keep awards and the overall costs of 

services within reasonable limits. This will benefit both the increasingly strained Medicare system and the increasingly tight average family budget. Moreover, we are acutely aware of information 

showing that awards in class action lawsuits too often pay pennies 

on the dollar to plaintiffs, while generating multi-million-dollar fee 

awards for the plaintiffs’ lawyers. These litigation horror stories 

surely offset the anecdotal evidence we have heard about alleged 

failures in individual arbitration cases.16

B. Trends in the Evolution of Arbitration Clauses In Nursing Home and Assisted Living Contracts 

Adding to the above factors, the nursing home and assisted living 

sectors have been moving toward extremely fair arbitration clause 

practices. According to Gavin Gadberry, the drafter of these sectors’ 

model arbitration clause and a witness at the legislative hearing on 

H.R. 6126: 

Over the course of the past ten years arbitration has became 

a more widely used alternative in long term care. This growth 

has been across the board for long term care providers—from 

single owner facilities to national chain facilities; and for nonproprietary and for-profit organizations. As a service to our 

member facilities and the residents they serve, in 2002 [the 

American Health Care Association and the National Center for 

Assisted Living] developed a model arbitration agreement form 

for possible use in the admission process. 

This model agreement in no way alters the rights or remedies 

available to a resident under state tort law. It states in plain 

English that entering into the arbitration agreement is not a condition of admission into the facility. Further, the model form provides 

a 30-day window for the resident or their representative to reconsider and, in writing, rescind the arbitration agreement. This 30- 

day ‘‘cooling off period’’ far exceeds the period of time found on 

most arbitration clauses.17

With this type of model practice taking firm hold, we are of the 

view that Congress’s goal should be to support the continued use 


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18See, e.g., Christine Varney, Arbitration Works Better than Lawsuits, Wall Street Journal 

(July 14, 2008). 

of mandatory binding arbitration in the nursing home and assisted 

living sectors, not to wipe it out. 

C. Larger Trends in Consumer Arbitration Contracts 

H.R. 6126, of course, also is proposed against the backdrop of 

general trends in the use of arbitration. In addition, it is proposed 

as the leading edge of a number of trial-lawyer-backed proposals to 

erode arbitration. It is therefore worth considering general trends 

in arbitration as well. These trends point strongly to the conclusion 

that arbitration generally benefits consumers. 

1. Arbitration Generally 

As discussed at the outset, arbitration is the classic means of alternative dispute resolution, and federal law has strongly promoted 

it for decades. One would particularly expect the accessibility and 

relative efficiency of arbitration to be useful in the many areas of 

consumer contracts. Consumers, on the one hand, stand to benefit 

from this quicker, less cumbersome and less expensive way of 

bringing often smaller-scale disputes to resolution. In fact, it is 

often arbitration that levels the playing field between consumers 

and companies.18 Providers of goods and services, meanwhile, 

stand to benefit from these same advantages. Indeed, they benefit 

all the more because these claims can be fairly repetitive and may 

be large in number. In the end, both consumers and providers 

stand to benefit from decreases in the costs of goods and services 

that can stem from the use of arbitration. 

The recent rise of mandatory binding arbitration clauses, however, seems to stem less from these general factors than from one 

particular factor. That factor is abuse of a competing, judicial form 

of consumer dispute resolution—the tort suit, particularly the class 

action tort suit. Particularly in response to the actual or perceived 

abuse of class action tort cases and class action lending disclosure 

suits, and due to the web of inconsistent substantive law and civil 

procedure in competing jurisdictions entertaining such suits, companies in numerous sectors of our economy have more and more resorted to the use of mandatory binding arbitration clauses. In this 

way, companies have sought to introduce a more orderly, less expensive, and more consistent set of rules for the resolution of their 

disputes with their customers. The movement to mandatory binding arbitration in the nursing home and assisted living sectors is 

just one part of this larger trend. 

2. Theories of Advocates for and Against Mandatory, Binding Arbitration Clauses 

Some consumer advocates suggest that consumers often lack the 

sophistication or bargaining power to understand and negotiate 

away from contracts containing mandatory binding arbitration 

clauses. These advocates also suggest that mandatory binding arbitration may be unfair in other ways, including: allegedly higher 

costs to consumers of initiating arbitration rather than litigation; 

companies’ alleged use of initial arbitration costs as a barrier to 

consumer-initiated disputes; arbitrators’ alleged tendency to favor 


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19See, e.g., Testimony of Stephen J. Ware, Professor of Law, Joint Hearing on ‘‘S.2838, the 

Fairness in Nursing Home Arbitration Act,’’ Senate Committee on the Judiciary, Subcommittee 

on Antitrust, Competition and Consumer Rights and Senate Special Committee on Aging at 1– 

4 (June 18, 2008); Alan S. Kaplinsky and Mark J. Levin, Consumer Arbitration: If the FAA 

‘‘Ain’t Broke,’’ Don’t Fix It,’’ The Business Lawyer, Vol. 63, No. 3 (May 2008); Testimony of Mark 

J. Levin, Esq., ‘‘Hearing on Mandatory Binding Arbitration Agreements: Are They Fair for Consumers,’’ Subcommittee on Commercial and Administrative Law, House Judiciary Committee 

(June 12, 2007) (‘‘Levin Testimony’’). 

businesses over consumers in their rulings; and businesses’ alleged 

tendency to require arbitration predominantly for those claims in 

which arbitration is more likely to benefit them. 

Based on these and other arguments, consumer advocates claim 

that the use of mandatory binding arbitration clauses should be 

curtailed. They also claim that mandatory binding arbitration 

clauses unfairly curtail consumer access to class actions. 

Those who support the use of mandatory binding arbitration, by 

contrast, argue that its elimination could leave small claimants 

with no effective legal recourse, and that strong institutional and 

market forces bearing on the use of arbitration in consumer contracts help to assure that consumers are fairly treated.19 For example, companies in competitive market sectors have interests in offering clauses that are framed in terms fair to consumers, in order 

to out-compete their rivals. Consumers, meanwhile, have incentives 

to seek out more favorable contract language offered by competing 

providers. 

Members of the arbitration sector, whose services will be used in 

disputes arising under arbitration clauses, likewise have competitive interests in offering services that are structured and delivered 

fairly to all participants, including consumers. This is particularly 

true in light of the ability of consumers to initiate arbitration. 

Courts, meanwhile, also place healthy pressures on the arbitration system. The courts review mandatory binding arbitration 

clauses for their validity and enforceability, and they can throw out 

clauses that violate contract and arbitration law. Courts have 

strong interests, moreover, in assuring that arbitration proceedings 

that will occur under the authority of their decisions are fair and 

capable of delivering just results for all concerned. 

Finally, the Federal Arbitration Act provides a statutory framework in which arbitration will take place. As a result, the arbitration system operates under a constant threat of congressional correction of abuses. This threat, of course, helps to curb the potential 

for abuse in the first place. 

3. The General Evidence for Mandatory Binding Arbitration 

Clauses 

The debate between proponents of these competing views is vigorous. Given the many strong forces acting to assure that mandatory binding arbitration clauses and the arbitrations pursuant to 

them are fair, however, it is perhaps not surprising that recent and 

growing evidence bears out the theory of those supporting the use 

of mandatory binding arbitration. 

Consumer-oriented companies, for example, have increasingly 

fostered consumer protection by offering so-called ‘‘fair clauses.’’ In 

these clauses, the rules of mandatory binding arbitration are fashioned so as to prevent undue advantages to companies. Such 

clauses increasingly are crafted to include provisions that: comply 


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20See, e.g., Levin Testimony at 11–14. 21 Navigant Consulting, Memorandum re: National Arbitration Forum: California Consumer 

Arbitration Data at 1–4 (available at http://www.instituteforlegalreform.com/issues/ 

docload.cfm?docId=1212); U.S. Institute for Legal Reform, U.S. Chamber of Commerce, Arbitration Better than Court for Consumer Debtors, Study Shows at 1–2 (July 15, 2008). 22Letter from American Health Care Association, et al. to Reps. Linda Sa ́nchez and Chris 

Cannon at 1 (July 14, 2008); Letter from U.S. Chamber of Commerce to Reps. Linda Sa ́nchez 

and Chris Cannon at 1 (July 14, 2008). 23 National Arbitration Forum, The Case for Pre-Dispute Arbitration Agreements: Effective and 

Affordable Access to Justice for Consumers: Empirical Studies & Survey Results (2004). 

with the consumer ‘‘due process’’ procedures of the major arbitrating services; allow either party to invoke arbitration; provide 

for the payment of the difference between court and arbitration 

fees; allow for fee-shifting to losing companies; permit requests 

from indigent consumers that companies pay the costs of arbitration, win or lose; and furnish off-ramps to small claims court for 

claims that would qualify for those fora.20 In addition, consumer 

contracts increasingly include opt-out clauses that allow consumers, for a time after entering into a contract, to opt-out of mandatory binding arbitration clauses while preserving the rest of the 

bargain represented in their contract. The nursing home and assisted living sectors’ model clause provides a good example of this, 

as it gives a generous, 30-day opt-out period. 

Evidence from empirical studies also points to the conclusion 

that institutional and market forces are adequately assuring fairness to consumers. A study by Navigant Consulting published in 

2008, for example, found that arbitration provides a substantial advantage to consumers. Analyzing results in California debt collection cases, the study found that consumers were four times more 

likely to lose in court than in arbitration.21 Our attention also has 

been drawn to a study by the California Dispute Resolution Institute, which is part of the University of San Francisco’s Leo T. 

McCarthy Center for Public Service and the Common Good. This 

study found that arbitration produces a win for consumers more 

than 70 percent of the time. The study also found that arbitration 

resolved disputes in an average of 100 days, while litigation, by 

contrast, averaged two years.22

Consistent with this evidence, the National Arbitration Forum 

recently published a synopsis of independent studies and surveys 

concerning the benefits of consumer arbitration. The results of 

these studies, as concerns consumer interests, can be summarized 

as follows: 

• Individuals prevail more often in arbitration than in court; 

• Consumers, more specifically, prevail 20% more often in arbitration than in court; 

• Monetary relief for individuals is higher in arbitration than 

in lawsuits; 

• Individuals receive a greater percentage of the relief requested in arbitration; 

• Arbitration is approximately 36% faster than litigation; 

• Sixty-four percent of American consumers would choose arbitration over a lawsuit for monetary damages; and 

• Ninety-three percent of consumers using arbitration find it 

to be fair.23


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24 Id. at 2. 25 Ernst & Young, Outcomes of Arbitration: An Empirical Study of Consumer Lending Cases 

(2004). 26 U.S. Chamber Institute for Legal Reform, Arbitration: Simple, Cheaper and Faster than 

Litigation: A Harris Interactive Study (2005). 

The results of these studies for business were similarly positive. 

For example, the NAF reported that 78% of business attorneys find 

that arbitration provides faster recovery than lawsuits, and 83% of 

business attorneys find arbitration to be as fair as or fairer than 

lawsuits.24

Separately, in December 2004, Ernst & Young issued a study of 

the outcomes of contractual arbitration in consumer-initiated, lending-related cases. The results of this study were as follows: 

• Consumers prevailed in 55% of cases that went to an arbitration hearing—the same win-rate that consumers obtain in 

state court; 

• Consumers obtained favorable results (via arbitration decision or settlement) in 79% of the cases that were reviewed; 

• 40% of consumers who brought arbitration claims actually 

got their ‘‘day in court,’’ while only 2.8% of cases in state 

court ever reached trial; 

• 69% of consumers surveyed indicated that they were very 

satisfied with the arbitration process.25

In April 2005, Harris Interactive released the results of an extensive survey of arbitration participants sponsored by the Institute 

for Legal Reform at the U.S. Chamber of Commerce. Prominent 

among this study’s findings were that: 

• Arbitration was widely seen as faster (74%), simpler (63%), 

and cheaper (51%) than going to court; 

• Two-thirds (66%) of participants said they would be likely to 

use arbitration again, with nearly half (48%) saying they 

were extremely likely to do so; 

• Even among those who lost, one-third said they were at least 

somewhat likely to use arbitration again; 

• Most participants were very satisfied with the arbitrator’s 

performance, the confidentiality of the process, and the 

length of the process; 

• Perhaps predictably, winners found the process and outcome 

very fair and losers found the outcome much less fair. Forty 

percent of those who lost, however, remained moderately to 

highly satisfied with the fairness of the process, and 21% 

were moderately to highly satisfied with the outcome.26

In short, the weight of evidence suggests that mandatory binding 

arbitration does not result in unfairness to consumers. If anything 

were likely to injure the interests that would be affected by H.R. 

6126 or other, similar proposals, it would be the limitation of the 

availability of arbitration to consumers seeking to resolve their disputes. Simple, bedrock principles of economics tell us that when 

fewer services are available with less competition (e.g., only litigation, only in the courts) that inevitably prejudices the consumer. 

Similarly, as one expert who testified before us has noted, if the 

restriction of arbitration introduces an economic drag on the econVerDate Aug 31 2005 01:12 Sep 29, 2008 Jkt 069006 PO 00000 Frm 00026 Fmt 6659 Sfmt 6601 E:\HR\OC\HR894.XXX HR894

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27Letter from Professor Peter B. Rutledge to the Honorable John Conyers and the Honorable 

Lamar Smith at 1–2 (July 14, 2008). 28See, e.g., Peter Lattman, Closing Argument: Mr. Lerach Mulls Life Behind Bars—Guilty but 

Defiant, the Plaintiffs’ Lawyer Kicks Back in La Jolla, Wall Street Journal at A1 (Feb. 12, 2008); 

Jonathan D. Glater, Big Penalty Set for Law Firm, but not a Trial, New York Times (June 17, 

2008). 29See, e.g., Nathan Koppel, Milberg Is Expected To Admit Wrongdoing in Settlement, Wall 

Street Journal at A4 (June 14, 2008). 30See, e.g., Nathan Koppel, Class-Action Law Firm Close to a Settlement, Wall Street Journal 

at A1 (June 2, 2008). 31 ‘‘A Fall and a Lesson,’’ The Washington Post (April 9, 2008) (editorial). 32Minority Leader Boehner’s and Ranking Member Smith’s letter is available online at http:// 

republicanleader.house.gov/News/DocumentSingle.aspx?DocumentID=90345. 

omy, it will do so at a most inopportune time, given the economy’s 

current state.27

D. The Unfolding Class-Action Scandal 

Lastly, we must bear in mind that it is largely to the class-action 

lawsuit industry that H.R. 6126 could send nursing home and assisted living residents and their families. That industry, however, 

is currently being rocked by a major scandal. This scandal involves, 

among other things, fabricated testimony, bought and sold to support false claims. Multiple renowned class action lawyers have been 

exposed and convicted in the scandal. One of them, William Lerach 

of Milberg Weiss, told the press that illegal kickbacks to people recruited to file class action lawsuits is an ‘‘industry practice.’’ 28 He 

and fellow trial lawyer Melvin Weiss engineered a $250 million 

criminal scheme to pay people to sue companies and are now federal prisoners.29 Another of America’s most prominent trial lawyers, Richard Scruggs of Mississippi, pled guilty earlier this year 

to bribing a state judge to obtain more legal fees.30

In light of the developing scandal, there has been a call for ‘‘a 

sober discussion about how best to achieve a fairer, more balanced 

legal system through comprehensive tort reform.’’ 31 On May 2, 

2008, Minority Leader John Boehner and House Judiciary Committee Ranking Member Lamar Smith called on House Judiciary 

Committee Chairman John Conyers to schedule swift hearings on 

these confirmed abuses within the legal system.32 The response 

from the majority, however, has been slow in coming. Currently, a 

forum on this issue is planned for sometime in September 2008, 

but the majority has not enabled hearings. 

When the heads of corrupt companies such as Enron were exposed, concerned Republicans and Democrats alike called for bipartisan hearings into the accounting industry. By contrast, when the 

heads of the class-action lawsuit industry are exposed, the result 

from Democrats is not congressional investigation. It is bills such 

as H.R. 6126 that would wipe out important parts of the arbitration system and generate still more lawsuit business for trial lawyers. We firmly believe that to be the wrong response. Bills such 

as H.R. 6126 should, at a minimum, wait until Congress has fully 

plumbed the class action scandal. 

III. LEGISLATIVE CONSIDERATION

A. Hearings 

The Subcommittee on Commercial and Administrative Law held 

two legislative hearings relevant to H.R. 6126. First, on June 12, 

2007, the Subcommittee held a general oversight hearing on manVerDate Aug 31 2005 01:12 Sep 29, 2008 Jkt 069006 PO 00000 Frm 00027 Fmt 6659 Sfmt 6601 E:\HR\OC\HR894.XXX HR894

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33See supra at 6–10. 

datory arbitration in consumer settings. This hearing focused on 

more typical consumer claims, such as credit-cards claims, but it offered strong evidence that arbitration generally works better and 

faster for consumers than does litigation. Much of this evidence is 

discussed above.33

Second, on June 10, 2008, the Subcommittee held a legislative 

hearing on H.R. 6126 itself. This hearing failed to show that there 

is any widespread abuse of arbitration in the nursing home and assisted living sectors. For example, while witnesses appearing on behalf of the trial bar and the American Association of Retired Persons alleged that there are quality-of-care shortcomings in nursing 

homes and assisted living facilities, they failed to demonstrate that 

the arbitration system is producing unfair results in these sectors. 

Indeed, their evidence consisted largely of sweeping generalities 

and opinions, unsupported by hard, empirical evidence. In addition, 

they erroneously premised their testimony on the view that arbitration agreements are generally foisted on residents and their 

families as a condition of admission, under conditions of duress. 

This obviously ignores the widespread model arbitration practices 

in the sectors, which do not make admission contingent on agreement to mandatory arbitration, and which allow for a 30-day optout period so that final agreements on arbitration can be made 

upon unhurried reflection. For all of these reasons, their evidence 

largely missed the point. Finally, the remaining proponent of the 

bill, an individual witness who appeared to discuss her specific 

case, could not identify any unfair feature of the arbitration award 

rendered in that proceeding. 

In fact, quite contrary to showing a need to restrict mandatory 

binding arbitration, the June 2008 hearing showed that the model 

arbitration clause used in the nursing home and assisted living sectors is quite fair; that arbitration has gone a long way to control 

the spiraling, lawsuit-driven costs of operation that threatened to 

shutter many facilities in the 1990s; and that, if any reforms are 

needed in this area, they should be found in efforts to make arbitration agreements and their negotiation still more transparent 

and thus better informed. Certainly, we should not be enacting legislation flying in the face of the long-standing federal promotion of 

arbitration—and nullifying the contracting rights of parties to 

thousands upon thousands of existing arbitration agreements— 

without a much more substantial showing that there is a systemic 

problem that we need to solve. 

B. Subcommittee Mark-up 

At subcommittee mark-up, Republicans offered several amendments to H.R. 6126. The first of these attempted to make the bill’s 

provisions strictly prospective. The second carved out claims 

against doctors and other highly trained health professionals, while 

allowing the bill’s provisions to apply to claims against facilities. 

Republicans also proposed to delay the bill’s effective date until the 

GAO could determine whether the bill would drive up Medicare entitlement costs. Republicans’ final amendment proposed to suspend 

the bill’s provisions if a study of average-time-to-litigate showed 


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34Stakeholders weighing in on H.R. 6126 also pointed us to the bill’s potential to leave small 

claimants without effective recourse. See, e.g., Letter from American Health Care Association, 

et al. to Reps. Linda Sa ́nchez and Chris Cannon at 2 (July 14, 2008) (‘‘According to one survey, 

plaintiffs’ employment lawyers said they would not take a case unless it was worth at least 

$60,000, on average. Therefore, without the option of arbitration, consumers would be faced with 

two choices-to try to navigate the legal system on their own, or to abandon their claim.’’); Letter 

from U.S. Chamber of Commerce to Reps. Linda Sa ́nchez and Chris Cannon at 2 (July 14, 2008) 

(same). Professor Stephen Ware of the University of Kansas School of Law submitted similar 

testimony to the Senate as it considered H.R. 6126’s companion legislation in that chamber. See 

Ware Testimony at 1–4. 

that claims involving personal injuries were taking more than six 

months on average to work their way through the courts. 

Together, these amendments would have ameliorated a number 

of the bill’s significant adverse effects. None was supported by the 

majority, however. The health professionals carve-out, for example, 

was rejected on a 6–4 party line vote, although the purported reasons for the bill concern disputes between residents and facilities, 

not residents and health care professionals. Republicans’ Medicare 

amendment was not even granted a vote. Notwithstanding the fundamental importance of preventing undue increases in Medicare 

costs, the majority ruled Republicans’ Medicare amendment nongermane. The Republican ‘‘speedy judgments’’ amendment was 

voted down, despite its particular importance to (1) speeding effective relief for Americans in their twilight years and (2) keeping 

down litigation costs for elderly, fixed-income residents. With regard to retroactivity, Subcommittee Chairwoman Sa ́nchez, the bill’s 

lead sponsor, did clarify that the bill was intended only to be prospective; the amendment was thus subsequently withdrawn. 

C. Full Committee Mark-up 

Again at full committee mark-up, Republicans offered a series of 

amendments aimed at preventing the bill’s adverse effects. Again, 

Democrats opposed these amendments. 

Two of the Republican amendments honed in on the bill’s sacrifice of the interests of residents and the health care system to the 

interests of the plaintiffs trial bar. Both allowed residents, at their 

option, to continue to arbitration their disputes. The first also limited attorneys’ fees to a maximum of $1,000 per hour when residents chose to litigate; further limited fees to what lawyers would 

have charged for arbitration, when they did no better in litigation 

than they would have done in arbitration; and required the GAO 

to study hourly fees charged in class actions. The second amendment would have strongly policed the use of bought, sold and fake 

class-action evidence in lawsuits brought in the wake of the bill. It 

would have done this by exposing class action lawyers and their 

firms to liability for treble damages for fees and judgments purloined on the basis of fake, purchased evidence. 

Both of these amendments were voted down by Democrats. Thus, 

the majority opted not only to favor the interests of trial lawyers 

over the interests of residents, but to ignore entirely the issues 

brought front and center by the burgeoning class action scandal. 

Remarkably, Democrats even opposed these amendments as one of 

their members explicitly acknowledged that lawyers would not take 

residents’ cases that did not promise big returns for lawyers—leaving hordes of small claimants out in the cold.34

As at subcommittee mark-up, Republicans also offered an amendment to delay the bill’s effective date until the GAO can determine 


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30 

whether the bill will drive up Medicare entitlement costs. Again, 

Democrats shuffled this issue off the table, ruling the amendment 

non-germane. Republicans also offered their amendment to carve 

out disputes between residents and health care professionals. 

Again, Democrats voted the amendment down, although their purported focus was on eliminating arbitration between residents and 

facilities. 

Finally, Republicans offered an amendment to preserve arbitration agreements that follow the remarkably fair, leading edge 

model arbitration agreement used in the nursing home and assisted living sectors. Democrats claimed through the bill to want to 

restore fairness to arbitration; had they supported this amendment, 

they would have advanced both fairness and arbitration. They 

voted against the amendment, however, and thus set both causes 

back. 

IV. CONCLUSION

As the above reflects, no compelling case has been made that 

mandatory arbitration is generally failing to bring fair and effective 

dispute resolution to nursing home and assisted living residents 

and their families. On the contrary, arbitration in these sectors is 

characterized by extremely fair model practices and has a record of 

effectively controlling costs for residents and facilities. What is 

needed is to encourage arbitration, not to wipe it out. That is particularly so when we know that the litigation alternative—including class-action litigation—has a record of abuse, is sure to produce 

a vicious cycle of escalating costs, and is mired in scandal. For 

these and all of the above reasons, we oppose H.R. 6126. 

LAMAR SMITH. 

CHRIS CANNON. 

JIM JORDAN. 

Æ 


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