Source: http://www.cclfirm.com/blog/category/601/
Timestamp: 2019-04-21 13:12:54+00:00

Document:
The Pennsylvania Supreme Court held on Oct. 27, 2015 that a nursing home that had required arbitration of disputes “in accordance with the National Arbitration Forum Code of Procedure” could not compel arbitration of claims of abuse and neglect. Wert v. Manorcare of Carlisle, Pa., LLC, No. 62 MAP 2014.
When plaintiff admitted her mother into defendant’s skilled nursing facility, she signed an agreement that all disputes be resolved by arbitration exclusively “in accordance with the National Arbitration Forum Code of Procedure.” Within six months, plaintiff’s mother died, allegedly due to abuse and neglect. Plaintiff filed suit and the nursing home filed preliminary objections, seeking to enforce the arbitration agreement. The trial court overruled the objections, finding the agreement unenforceable because NAF had entered into a consent decree in 2009 that barred it from administering arbitrations of consumer disputes. The court held that this provision was integral to the agreement and was therefore not severable from the remainder of the arbitration agreement. The Pennsylania Superior Court affirmed, and the Pennsylvania Supreme Court granted review.
The American Association for Justice filed an amicus curiae brief supporting plaintiff, authored by CCL Senior Counsel Jeffrey R. White. The brief emphasized that the nursing home was not simply asking the court for a substitute arbitrator, but for an alternative arbitral forum and administrator, which would require extensive rewriting of the parties’ agreement. Moreover, § 5 of the Federal Arbitration Act, which the nursing home heavily relied upon as authority for appointing a substitute arbitrator, does not authorize the court to appoint a substitute arbitral forum.
Have employers hijacked federal protections for seafarers enacted by Congress by using mandatory arbitration clauses in their employment contracts for those who work aboard U.S. based vessels? On March 23, 2015, CCL filed an amicus curiae brief on behalf of the American Association for Justice asking the Supreme Court to halt this erosion of federal statutory rights by accepting Pysarenko v. Carnival Corp., Docket No.14-12378, for review.
Vitalii Pysarenko, a citizen of Ukraine (now a permanent resident of the U.S.), was employed by Carnival Cruise Lines, headquartered in Miami. He was injured while moving heavy equipment aboard the Carnival Dream in Port Canaveral, Fla. Pysarenko brought suit under the Jones Act and the Seamen’s Wage Act. Carnival moved to compel arbitration, alleging that the manadory arbitration provision in Pysarenko’s employment contract was enforceable under Chapter 2 of the Federal Arbitration Act, which implements the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, including those between U.S citizens and citizens of foreign countries. The district court granted Carnival’s motion to compel arbitration in Monaco while applying Panamanian law as provided in the employment contract. The Eleventh Circuit affirmed.
AAJ’s amicus brief supporting Pysarenko’s Petition for Certiorari, prepared by CCL Senior Counsel Jeffrey R. White, emphasized the Court’s historic role in protecting the rights of seafarers, long deemed “wards of the admiralty.” That role remains essential with respect to the cruise industry, which makes use of “flags of convenience” to evade safety regulations. AAJ also pointed out to the Court that the enforcement of mandatory arbitration agreements under Chapter 2 of the FAA also extends to U.S. citizen seamen who hire onto foreign vessels and to U.S. seamen working aboard U.S. vessels, where the employment contract has some connection with a foreign nation.
Enforcement of the arbitration provision under Chapter 2 of the FAA raises three important issues that should be resolved by the Supreme Court. First, enforcement violates § 1 of the FAA, which states that “nothing herein contained shall apply to contracts of employment of seamen.” Second, enforcement violates the Federal Employers Liability Act, 45 U.S.C. § 55, which is incorporated into the Jones Act and states that any contract “the purpose or intent of which shall be to enable any common carrier to exempt itself from any liability created by this chapter, shall to that extent be void.” Third, enforcement violates the Court’s precedents stating that federal statutory rights may be the subject of arbitration only where the party may vindicate his federal rights in the arbitral forum. In this case, because the laws of Panama offer no rights to seafarers comparable to the Jones Act and Seamen’s Wage Act, the mandatory arbitration provision operates as a prohibited prospective waiver of federal statutory rights.
The plaintiffs in Johnson v. Kindred Healthcare, Inc., were represented by former CCL attorney John Vail and by David J. Hoey of North Reading, MA.
“Arbitration is not health care,” CCL’s John Vail told the Massachusetts Supreme Judicial Court yesterday, urging it not to enforce an arbitration agreement signed by a person authorized to make health care decisions for a nursing home resident whose death allegedly was caused by the nursing home’s neglect.
An active bench peppered Vail and opposing counsel with questions. In response to one, Vail noted that deciding when a patient gets mail, or what he eats, are, unlike arbitration, necessary incidents of providing health care to an incompetent person in a residential setting. Illustrating her point that it was questionable whether a health care proxy had even the power to use the principal’s money to pay health care bills, one Justice asked Vail’s opponent whether a proxy was empowered to sell a principal’s house to pay them. No cogent answer came forth.
The Court, which recently issued two opinions finding that prior decisions about arbitration were pre-empted under recent Supreme Court decisions, speculated about whether the Federal Arbitration Act would permit it to treat paying bills as within the scope of the health care proxy but agreeing to arbitration as outside the scope.
The plaintiffs in Johnson v. Kindred Healthcare, Inc., are represented, in addition to Vail, by David J. Hoey of North Reading, MA. The case was consolidated for argument with Licata v. GGNSC Malden Dexter, LLC. A decision is expected within 130 days.
A nursing home that allegedly killed one of its residents will have to defend itself in court, and not before a secret arbitral panel. Yesterday, the New Mexico Supreme Court denied review of a decision by the New Mexico Court of Appeals that had rejected arbitration, adopting arguments made by CCL.
“Nursing homes cannot bury their dead in private. The victim’s family will have its day in court,” said CCL attorney John Vail, counsel for plaintiffs in the case.
The Court of Appeals had ruled that the unavailability of the discredited National Arbitration Forum (NAF) rendered the arbitration agreement unenforceable. Although the agreement between the victim and the nursing home did not designate NAF as the arbitrator, it did require that NAF’s rules be used in any arbitration. CCL pointed out that the NAF rules provided that no one but NAF was allowed to use them, and that therefore there was no difference between this agreement and one that did designate NAF.
The NM Supreme Court had previously held that an agreement designating NAF as arbitrator was unenforceable because they had agreed with the Minnesota Attorney General not to administer consumer arbitrations after the Attorney General charged NAF with running a biased arbitral scheme. Yesterday’s denial of the nursing home’s petition for certiorari reaffirms that ruling.
Dusti Miller and Jennifer Foote of the Miller Law Firm in Albuquerque are co-counsel with CCL on the case.
In a decision one justice called a “betrayal of our precedents,” the Supreme Court today ruled that corporations can use arbitration clauses to insulate themselves from liability.
The decision culminates a thirty-year judicial effort by the Court to turn an innocuous 1920s statute, the Federal Arbitration Act, into a weapon used to thwart enforcement of rights by consumers, employees, and small businesses.
The restaurant, invoking a line of Supreme Court cases that held open the possibility that courts could invalidate arbitration clauses that effectively precluded vindication of federal statutory rights, opposed arbitration. It demonstrated that costs of litigating an individual claim were “’at least several hundred thousand dol­lars, and might exceed $1 million,’ while the maximum recovery for an individual plaintiff would be $12,850, or $38,549 when trebled,” and argued that preclusion class resolution effectively precluded it from vindicating its claim.
The Second Circuit agreed with the restaurant, having held that “the only economically feasible means for . . . enforcing [respondents’] statutory rights is via a class action.” The Supreme Court reversed.
CCL’s John Vail participated in the filing of an amicus curiae brief in the case on behalf of Public Justice, AARP, and the American Association for Justice. Today’s decision effectively leaves only Congress to provide recourse.
A nursing home that allegedly killed one of its residents will have to defend itself in court, and not before a secret arbitral panel, the New Mexico Court of Appeals ruled today, adopting arguments made by CCL.
“This is another good decision saying that nursing homes cannot bury their dead in private,” said CCL attorney John Vail, counsel for plaintiffs in the case.
While numerous issues were before the Court, it focused on one narrow one: whether the unavailability of the discredited National Arbitration Forum (NAF) rendered the arbitration agreement unenforceable.
The agreement in question did not designate NAF as the arbitrator, but it did require that NAF’s rules be used in any arbitration. CCL pointed out that the NAF rules provided that no one but NAF was allowed to use them, and that therefore there was no difference between this agreement and one that did designate NAF.
The NM Supreme Court already had held that an agreement designating NAF as arbitrator was unenforceable because they had agreed with the Minnesota Attorney General not to administer consumer arbitrations after the Attorney General charged NAF with running a biased arbitral scheme.
Dusti Miller and Jennifer Foote of the Miller Law Firm in Albuquerque are co-counsel on the case.
The Consumer Financial Protection Bureau (CFPB) should ban mandatory arbitration in consumer contracts, CCL attorney John Vail told lawyers from state attorney general offices at a symposium at the George Mason University law school.
“A mandatory arbitration agreement with a class action ban is not a get out of jail free card; it’s a slip $500 to the parole board and get out of jail card,” Vail told the assembled audience, explaining that the clauses have the purpose and effect of suppressing claims.
The symposium brought together academics and practitioners to discuss how the CFPB might use its powers to alter the balance of power between consumers and businesses. It was sponsored by the law and economics program at GMU.
Despite demonstrating little support for consumer interests in frequent pronouncements on mandatory arbitration, the Supreme Court denied review of a nursing home wrongful death case, preserving the day in court for the aggrieved family. CCL lawyer John Vail was counsel for the successful plaintiff. Court watchers had identified the case as one the Court might take and reverse.
In the case the Kentucky Supreme Court had decided that the decedent’s signature on an arbitration agreement could not bind the persons damaged by the decedent’s death because they press their own claims, not the claim of the person who was killed.
“The Kentucky court said, in effect: you have to own the Brooklyn Bridge before you can pass title to someone else,” Vail said.
The Kentucky court also had ruled that a power of attorney which granted authority to do things “necessary” for another person did not grant authority to sign an arbitration agreement that was not required as a condition of admission to a nursing home.
The nursing home argued that the Kentucky court had discriminated against arbitration and had created obstacles to fulfilling the purposes of the Federal Arbitration Act.
The case is Beverly Enterprises v. Ping, No. 12-652. Steve O’Brien of Lexington, Kentucky, was counsel in the Kentucky courts. The case will return to the Kentucky courts to move toward trial by jury.
When Massachusetts passed a law making it easier for family members to make health care decisions for their incapacitated relatives, it did not authorize family members to make decisions about litigation, CCL’s John Vail told the Massachusetts Supreme Judicial Court in a brief filed today.
Dalton Johnson gave his wife, Barbara, a proxy allowing her to make “health care decisions” if he became incapacitated. At issue in the case is whether that proxy gave her authority to bind him to an arbitration clause she signed when arranging nursing home care for him, before there was any dispute about his care.
The Massachusetts statute at issue limits “health care decisions” to decisions consistent with good medical practice. This excludes arbitration, Vail’s brief told the court, because it is not medical practice. The brief noted that predispute arbitration clauses like the one here have, in fact, been condemned by the medical profession.
The plaintiffs are represented, in addition to Vail, by David J. Hoey and Nicole Paquin of North Reading, MA. The case is Johnson v. Kindred Healthcare, Inc. Oral argument has not yet been scheduled.

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