Court Opinion

ID: 3135613
Source: CourtListenerOpinion
Date Created: 2015-10-22 17:39:44.888749+00
Date Added: 2024-06-11T11:54:11.857116
License: Public Domain

Docket No. 106511.

                             IN THE
                     SUPREME COURT
                                OF
                THE STATE OF ILLINOIS

                       __________________

SUE CARTER, Special Adm’r of the Estate of Joyce Gott, Deceased,
Appellee (Lisa Madigan, Attorney General of the State of Illinois,
Intervenor-Appellee), v. SSC ODIN OPERATING COMPANY,
          LLC, d/b/a Odin Healthcare Center, Appellant.

                   Opinion filed April 15, 2010.

   JUSTICE THOMAS delivered the judgment of the court, with
opinion.
   Chief Justice Fitzgerald and Justices Kilbride, Garman, and Burke
concurred in the judgment and opinion.
   Justices Freeman and Karmeier took no part in the decision.

                             OPINION

    The narrow question presented in this case is whether the
antiwaiver provisions of the Nursing Home Care Act (210 ILCS
45/3–606, 3–607 (West 2006)) are “grounds as exist at law or in
equity for the revocation of any contract” within the meaning of
section 2 of the Federal Arbitration Act (FAA) (9 U.S.C. §2 (2000)).
The appellate court answered this question in the affirmative, finding
that the antiwaiver provisions avoid the preemptive effect of the FAA
on that basis. For the reasons that follow, we reverse the judgment of
the appellate court and remand the cause so that the appellate court
may consider issues raised by the parties but not previously addressed.

                            BACKGROUND
     Plaintiff, Sue Carter, is the special administrator of the estate of
Joyce Gott. Defendant, SSC Odin Operating Company, LLC, is a
nursing home located in Odin, Illinois, that does business as Odin
Healthcare Center. Gott was a resident of defendant’s nursing home
from May 20, 2005, until July 29, 2005, and again from January 12,
2006, until her death on January 31, 2006. Plaintiff, acting as the legal
representative of Gott, entered into a written “Health Care Arbitration
Agreement” with defendant on May 20, 2005, upon Gott’s initial
admission. Gott herself signed a “Health Care Arbitration Agreement”
six days after her second admission. Plaintiff’s signature does not
appear on this second agreement, and both agreements are comprised
of the same, identical terms.
     In both agreements, the parties agreed to submit to binding
arbitration “all disputes with each other and their representatives
arising out of or in any way related or connected to the Arbitration
Agreement and all matters related thereto including matters involving
the Resident’s stay and care provided at the Facility.” Specifically
included within the scope of the agreements were “any disputes
concerning whether any statutory provisions relating to the Resident’s
rights under Illinois law were violated.” The agreements also stated
that each party waived its right to a trial by jury, stating in all capital
letters:
              “YOU CANNOT BE REQUIRED TO SIGN THIS
         AGREEMENT IN ORDER TO RECEIVE TREATMENT,
         BY SIGNING THIS AGREEMENT, YOUR RIGHT TO
         TRIAL BY JURY OR A JUDGE IN COURT WILL BE
         BARRED AS TO ANY DISPUTE RELATING TO
         INJURIES THAT MAY RESULT FROM NEGLIGENCE
         DURING YOUR TREATMENT OR CARE, AND WILL BE
         REPLACED BY AN ARBITRATION PROCEDURE.
              THIS AGREEMENT PROVIDES THAT ANY CLAIM
         WHICH MAY ARISE OUT OF YOUR HEALTH CARE
         WILL BE SUBMITT ED TO A PANEL OF

                                   -2-
        ARBITRATORS, RATHER THAN TO A COURT FOR
        DETERMINATION. THIS AGREEMENT REQUIRES ALL
        PARTIES SIGNING IT TO ABIDE BY THE DECISION OF
        THE ARBITRATION PANEL.”
The agreements further stated, however, that they do not apply to
“any dispute where the amount in controversy is less than ***
$200,000.” The parties also agreed that the resident or legal
representative would have a right to rescind the agreement within 30
days of signing and that the execution of the agreement was not a
precondition for admission to the facility. The agreements additionally
provided that defendant would pay all arbitrator fees and up to $5,000
in reasonable “attorney fees and costs for the Resident in any claims
against the Facility.” Finally, the agreements noted that they were
governed by the FAA and that if any portion was determined invalid
or unenforceable, the remainder of the terms would continue to be
binding.
    Following Gott’s death, plaintiff filed a two-count complaint in the
circuit court of Marion County against defendant. Count I was a
statutory survival claim that alleged violations of the Nursing Home
Care Act (210 ILCS 45/2–107, 1–117 (West 2006)) and regulations
promulgated by the Illinois Department of Public Health pursuant to
that Act. Count II was a statutory action under the Wrongful Death
Act (740 ILCS 180/0.01 et seq. (West 2006)). In both counts, plaintiff
alleged that defendant had failed to provide adequate and properly
supervised care as needed by Gott. In count I, plaintiff alleged that
defendant’s acts and omissions resulted in Gott suffering injuries
between January 12, 2006, and January 31, 2006, during Gott’s
second stay at the facility. In the wrongful-death count, plaintiff
alleged that defendant’s acts and omissions resulted in Gott’s death
and therefore the loss of companionship and society for her heirs.
    Defendant filed an answer to the complaint, denying the
allegations therein and asserting various affirmative defenses,
including that both counts of the lawsuit were precluded by the
arbitration agreements that were signed by Gott and plaintiff. Later,
defendant filed a motion to compel arbitration, relying on section 2 of
the FAA, which provides in relevant part as follows:
            “A written provision in *** a contract evidencing a
        transaction involving commerce to settle by arbitration a

                                  -3-
         controversy thereafter arising out of such contract or
         transaction, or the refusal to perform the whole or any part
         thereof, or an agreement in writing to submit to arbitration an
         existing controversy arising out of such a contract,
         transaction, or refusal, shall be valid, irrevocable, and
         enforceable, save upon such grounds as exist at law or in
         equity for the revocation of any contract.” 9 U.S.C. §2
         (2000).
Defendant attached to his motion a memorandum of law, a copy of
each of the agreements, and the affidavit of Mary Ann Smith,
defendant’s chief administrator, setting forth facts that allegedly
established that the arbitration agreements involved interstate
commerce within the meaning of section 2 of the FAA.
    Plaintiff filed a memorandum of law (and supplement) in
opposition to the motion to compel arbitration, arguing, among other
things, that the agreements were in violation of the public policy of
this state, as expressed in sections 3–606 and 3–607 of the Nursing
Home Care Act, and were therefore void. Section 3–606 of the Act
provides that “[a]ny waiver by a resident or his legal representative of
the right to commence an action under Sections 3–601 through
3–607, whether oral or in writing, shall be null and void, and without
legal force or effect.” 210 ILCS 45/3–606 (West 2006). Section
3–607 of the Act provides that “[a]ny party to an action brought
under Sections 3–601 through 3–607 shall be entitled to a trial by jury
and any waiver of the right to a trial by a jury, whether oral or in
writing, prior to commencement of an action, shall be null and void,
and without legal force or effect.” 210 ILCS 45/3–607 (West 2006).
Plaintiff contended that the public policy behind the antiwaiver
provisions of sections 3–606 and 3–607 is a generally applicable
defense to all contracts in Illinois and therefore that policy is a
“grounds as exist at law *** for the revocation of any contract”
sufficient to negate FAA preemption. See 9 U.S.C. §2 (2000). Plaintiff
also raised three additional contentions in her effort to avoid
arbitration: (1) the FAA did not apply because the arbitration
agreements did not involve interstate commerce; (2) the agreements
were void for a lack of a mutual obligation to arbitrate; and (3)
because she did not sign the second arbitration agreement, she could
not be compelled to arbitrate.

                                  -4-
    The circuit court denied the motion to compel arbitration without
an evidentiary hearing. First, the court found that with respect to the
wrongful-death claim, the right to proceed to recovery through
arbitration is considered a “right of action.” Thus, even if Gott would
have had to proceed to arbitration had she lived and wanted to
recover for her injuries, she nonetheless still had a “cause of action.”
According to the circuit court, although Gott was bound by the
agreements for her own claims, a plaintiff bringing claims on behalf of
the estate is not bound by the agreements. Second, with respect to the
survival count, the court found that the claim was valid because the
arbitration agreement was “unenforceable both because it is in direct
violation of emphatically stated public policy and for lack of
mutuality.” Finally, the circuit court seemed to be addressing whether
the transaction involved “interstate commerce” within the meaning of
the FAA when it made the following finding:
        “Further, the underlying contractual relationship was between
        an elderly Marion County resident and a Marion County care
        facility. The contract was for personal care within this county.
        The action relates to the care provided. The statute involved
        here is a public safety statute that affects the relationships
        between the contracting parties. This trial court believes that
        in the aggregate the economic activity does not represent
        general practice subject to federal control.”
    The appellate court affirmed the circuit court’s decision, but did
so on the basis of a single question of law–whether the “public policy”
expressed in the Nursing Home Care Act was an ordinary state-law
contract defense applicable to all contracts, and thus beyond the
preemptive effect of the FAA. 381 Ill. App. 3d 717, 721. The
appellate court found that sections 3–606 and 3–607 embodied a
public policy that applied to all contracts generally and did not
“specifically target arbitration.” 381 Ill. App. 3d at 722-23. The court
concluded that this public policy was a legitimate contract defense
within the language of section 2 of the FAA (i.e., “save upon such
grounds as exist at law or equity for the revocation of any contract”)
that can void an arbitration agreement. In reaching this conclusion, the
court found defendant’s reliance upon Perry v. Thomas, 482 U.S.
483, 96 L. Ed. 2d 426, 107 S. Ct. 2520 (1987), and Doctor’s
Associates, Inc. v. Casarotto, 517 U.S. 681, 134 L. Ed. 2d 902, 116

                                  -5-
S. Ct. 1652 (1996), to be misplaced because the antiwaiver provisions
in the Nursing Home Care Act do not specifically mention arbitration,
and also because, under the Illinois statute, a contract that does not
mention arbitration but requires a bench trial would be voided to the
same extent as a contract requiring arbitration. 381 Ill. App. 3d at
722.
     This court initially denied defendant’s petition for leave to appeal
on September 24, 2008. Defendant then filed a petition for a writ of
certiorari in the United States Supreme Court. There, defendant
argued that the appellate court misread the holdings of Perry and
Casarotto, and that its decision conflicted with Preston v. Ferrer, 522
U.S. 346, 169 L. Ed. 2d 917, 128 S. Ct. 978 (2008), and Southland
Corp. v. Keating, 465 U.S. 1, 79 L. Ed. 2d 1, 104 S. Ct. 852 (1984),
as well as with the holdings in four federal circuits. In its brief in
opposition to the motion for a writ of certiorari, plaintiff argued that
the intermediate nature of the appellate court’s decision was a factor
that weighed against allowing the petition. Plaintiff noted the
possibility that a conflict could arise among panels of the Illinois
appellate court on the issue, thereby requiring resolution by the Illinois
Supreme Court. Therefore, plaintiff asserted, the United States
Supreme Court, as a court of last resort, should not grant certiorari
because the issue has not been finally settled by Illinois in the absence
of a decision by the Illinois Supreme Court. On May 8, 2009, shortly
after plaintiff filed her brief in opposition to the writ, the Illinois
Appellate Court, Second District, filed Fosler v. Midwest Care Center
II, Inc., 391 Ill. App. 3d 397 (2009), which held that the FAA
preempted the antiwaiver provisions of the Nursing Home Care Act.1
Fosler expressly rejected the contrary holding of the Fifth District in
the present case. Fosler, 391 Ill. App. 3d at 399 (found that Carter
was wrongly decided and could not be reconciled with Perry).
Defendant’s petition for a writ of certiorari was denied on June 1,
2009.
     Citing a conflict between the Second District’s decision in Fosler

    1
     We note that subsequent to the release of this published opinion in
Fosler, the Second District, on March 1, 2010, filed a modified opinion upon
denial of rehearing. It did not, however, revise its previous holding.

                                    -6-
and the Fifth District’s decision in this case, defendant filed a motion
in this court for reconsideration of the denial of its petition for leave
to appeal. On August 7, 2009, this court granted defendant’s motion
and allowed the petition for leave to appeal. 210 Ill. 2d R. 315. We
exercise jurisdiction in this case pursuant to our supervisory authority
over the Illinois court system. See Ill. Const. 1970, art. VI, §16; In re
Estate of Funk, 221 Ill. 2d 30, 97-98 (2006); People v. Lyles, 217 Ill.
2d 210, 216 (2005) (our supervisory authority is a broad and
unlimited power that grants jurisdiction without need to articulate its
instruments or agencies). We also allowed the Attorney General of the
State of Illinois leave to intervene as an additional appellee. 735 ILCS
5/2–408(c) (West 2008). For the reasons that follow, we reverse the
judgment of the appellate court on the issue that it addressed, and we
remand the cause to the appellate court so that it may consider and
decide issues not reached by it previously. See Schwartz v. Cortelloni,
177 Ill. 2d 166, 172 (1997).

                              ANALYSIS
    At the outset, we note that the appellate court did not consider the
question of whether the parties’ agreement evidenced “a transaction
involving commerce” within the meaning of the FAA (9 U.S.C. §2
(2000)), and it is not entirely clear that the circuit court reached this
issue either. We assume arguendo that the transaction satisfied the
interstate commerce requirement of the FAA, but this is an issue that
should be addressed by the appellate court on remand.
    We now turn to the sole issue addressed by the appellate
court–whether the antiwaiver policy expressed in the Nursing Home
Care Act is a generally applicable contract defense that negates FAA
preemption. Questions of federal preemption and statutory
interpretation present questions of law that are subject to de novo
review. Board of Education, Joliet Township High School District
No. 204 v. Board of Education, Lincoln Way Community High School
District No. 210, 231 Ill. 2d 184, 194 (2008).
    The preemption doctrine is derived from the supremacy clause of
article VI of the United States Constitution, which provides that the
laws of the United States “shall be the supreme Law of the Land ***
any Thing in the Constitution or Laws of any State to the Contrary

                                  -7-
notwithstanding.” U.S. Const., art. VI, cl. 2. Thus, state law is null
and void if it conflicts with federal law. Sprietsma v. Mercury Marine,
197 Ill. 2d 112, 117 (2001).
     Federal law preempts state law under the supremacy clause in any
one of the following three circumstances: (1) express
preemption–where Congress has expressly preempted state action; (2)
implied field preemption–where Congress has implemented a
comprehensive regulatory scheme in an area, thus removing the entire
field from the state realm; or (3) implied conflict preemption–where
state action actually conflicts with federal law. Sprietsma, 197 Ill. 2d
at 117. The key inquiry in any preemption analysis is to determine the
intent of Congress. City of Chicago v. Comcast Cable Holdings,
L.L.C., 231 Ill. 2d 399, 405 (2008).
     In the present case, only conflict preemption is at issue. This is
because the FAA contains no express preemption provision, and it
does not indicate a congressional intent to occupy the entire field of
arbitration. Volt Information Sciences, Inc. v. Board of Trustees of the
Leland Stanford Junior University, 489 U.S. 468, 477, 103 L. Ed. 2d
488, 499, 109 S. Ct. 1248, 1255 (1989). Thus, state law is preempted
by the FAA to the extent that it actually conflicts with state law, that
is, to the extent that it “ ‘stands as an obstacle to the accomplishment
and execution of the full purposes and objectives of Congress.’ ” Volt
Information Sciences, 489 U.S. at 477, 103 L. Ed. 2d at 499, 109 S.
Ct. at 1255, quoting Hines v. Davidowitz, 312 U.S. 52, 67, 85 L. Ed.
581, 587, 61 S. Ct. 399, 404 (1941). This inquiry requires us to
consider the relationship between state and federal laws as they are
interpreted and applied and not simply as they are written. Jones v.
Rath Packing Co., 430 U.S. 519, 526, 51 L. Ed. 2d 604, 614, 97 S.
Ct. 1305, 1310 (1977). Moreover, it is well settled that uniformity of
decision is an important consideration when state courts interpret
federal statutes, and we will give “considerable weight” to the
decisions of federal courts that have addressed preemption under
section 2 of the FAA. See Sprietsma, 197 Ill. 2d at 120 (citing
Weiland v. Telectronics Pacing Systems, Inc., 188 Ill. 2d 415, 422
(1999), Wilson v. Norfolk & Western Ry. Co., 187 Ill. 2d 369, 383
(1999), and Busch v. Graphic Color Corp., 169 Ill. 2d 325, 335
(1996)). We also recognize that decisions of the United States
Supreme Court addressing FAA preemption are binding on this court.

                                  -8-
See Bowman v. American River Transportation Co., 217 Ill. 2d 75,
91 (2005).
     The basic purpose of the FAA is to overcome the historical
reluctance of courts to enforce agreements to arbitrate. Allied-Bruce
Terminix Cos. v. Dobson, 513 U.S. 265, 270, 130 L. Ed. 2d 753, 762,
115 S. Ct. 834, 838 (1995). When Congress passed the FAA in 1925,
it intended courts to enforce agreements by parties to arbitrate and to
place such agreements on the same footing as other contracts. Allied-
Bruce, 513 U.S. at 270-71, 130 L. Ed. 2d at 762, 115 S. Ct. at 838.
A state statute stands as an obstacle to the purposes of the FAA if it
targets arbitration provisions for disfavored treatment not applied to
other contractual terms generally. Allied-Bruce, 513 U.S. at 281, 130
L. Ed. 2d at 769, 115 S. Ct. at 843. Similarly, state provisions form
an obstacle if they “take their meaning from the fact that a contract to
arbitrate is at issue, or frustrate arbitration, or provide a defense to it.”
Securities Industry Ass’n v. Connolly, 883 F.2d 1114, 1123 (1st Cir.
1989).
     Here, defendant argues that the appellate court misconstrued the
United States Supreme Court’s decisions in Perry and Casarotto, and
failed to consider the more factually and analytically pertinent
decisions of Southland Corp. v. Keating, 465 U.S. 1, 79 L. Ed. 2d 1,
104 S. Ct. 852 (1984), and Preston v. Ferrer, 552 U.S. 346, 169 L.
Ed. 2d 917, 128 S. Ct. 978 (2008). We agree.
     Over 25 years ago, in Southland, the Supreme Court first held that
the FAA applies in state as well as federal court and preempts
conflicting state laws. Southland, 465 U.S. at 16, 79 L. Ed. 2d at 15,
104 S. Ct. at 861. Southland involved a provision of the California
Franchise Investment Law that provided that “ ‘[a]ny condition,
stipulation or provision purporting to bind any person acquiring any
franchise to waive compliance with any provision of this law or any
rule or order hereunder is void.’ ” Southland, 465 U.S. at 10, 79 L.
Ed. 2d at 11, 104 S. Ct. at 858, quoting Cal. Corp. Code Ann. §31512
(West 1977). The California Supreme Court interpreted this statute to
require judicial consideration of claims brought under it and therefore
refused to enforce the parties’ contract to arbitrate such claims.
Southland, 465 U.S. at 10, 79 L. Ed. 2d at 11, 104 S. Ct. at 858. In
reversing the California Supreme Court, the United States Supreme
Court began its analysis by noting “a national policy favoring

                                    -9-
arbitration” that 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.” Southland, 465 U.S. at 10, 79 L. Ed. 2d at
12, 104 S. Ct. at 858. In holding that the California law violated the
supremacy clause, the Court found that Congress “intended to
foreclose state legislative attempts to undercut the enforceability of
arbitration agreements.” Southland, 465 U.S. at 16, 79 L. Ed. 2d at
15, 104 S. Ct. at 861. Finally, the majority in Southland addressed the
partial dissent of Justice Stevens, which relied on the fact that section
2 of the FAA “permits a party to nullify an agreement to arbitrate on
‘such grounds as exist at law or in equity for the revocation of any
contract.’ ” Southland, 465 U.S. at 16 n.11, 79 L. Ed. 2d at 15 n.11,
104 S. Ct. at 861 n.11. In that regard, the majority stated as follows:
         “We agree, of course, that a party may assert a general
         contract defenses such as fraud to avoid enforcement of an
         arbitration agreement. We conclude, however, that the defense
         to arbitration found in the California Franchise Investment
         Law is not a ground that exists at law or in equity ‘for the
         revocation of any contract’ but merely a ground that exists for
         the revocation of arbitration provisions in contracts subject to
         the California Franchise Investment Law. Moreover, under
         this dissenting view, ‘a state policy of providing special
         protection for franchisees ... can be recognized without
         impairing the basic purposes of the federal statute.’ Post, at
         21. If we accepted this analysis, states could wholly eviscerate
         congressional intent to place arbitration agreements ‘upon the
         same footing as other contracts,’ H.R. Rep. No. 96, 68th
         Cong., 1st Sess., 1 (1924), simply by passing statutes such as
         the Franchise Investment Law. We have rejected this analysis
         because it is in conflict with the [FAA] and would permit
         states to override the declared policy requiring enforcement of
         arbitration agreements.” (Emphasis in original.) Southland,
465 U.S. at 16 n.11, 79 L. Ed. 2d at 15 n.11, 104 S. Ct. at
         861 n.11.
    The Supreme Court next considered FAA preemption in Perry,
holding that section 2 of the FAA, “which mandates enforcement of
arbitration agreements, pre-empts §229 of the California Labor Code,
which provides that actions for the collection of wages may be

                                  -10-
maintained ‘without regard to the existence of any private agreement
to arbitrate.’ ” Perry, 482 U.S. at 484, 96 L. Ed. 2d at 432, 107 S. Ct.
at 2522-23, quoting Cal. Lab. Code Ann. §229 (West 1971). The
Court began its analysis by strongly emphasizing that section 2 of the
FAA embodied a “liberal federal policy favoring arbitration
agreements, notwithstanding any state substantive or procedural
policies to the contrary.” Perry, 482 U.S. at 489, 96 L. Ed. 2d at 435,
107 S. Ct. at 2525 (court also stated that section 2 “declared a
national policy favoring arbitration” and is a “clear federal policy of
requiring arbitration”). The Court addressed the viability of general,
state-contract-law defenses, like unconscionabilty, to attack
agreements to arbitrate. The Court noted that “state law, whether of
legislative or judicial origin, is applicable if that law arose to govern
issues concerning the validity, revocability, and enforceability of
contracts generally. A state-law principle that takes its meaning
precisely from the fact that a contract to arbitrate is at issue does not
comport with this requirement ***.” (Emphasis in original.) Perry,
482 U.S. at 492 n.9, 96 L. Ed. 2d at 437 n.9, 107 S. Ct. at 2527 n.9.
The Court continued that courts may not construe arbitration
agreements differently from what it would otherwise construe
nonarbitration agreements, nor may they “rely on the uniqueness of an
agreement to arbitrate as a basis for a state-law holding that
enforcement would be unconscionable.” Perry, 482 U.S. at 492 n.9,
96 L. Ed. 2d at 437 n.9, 107 S. Ct. at 2527 n.9.
     In Casarotto, the Court was faced with a Montana statute that
declared an arbitration clause unenforceable unless “ ‘[n]otice that
[the] contract is subject to arbitration’ is ‘typed in underlined capital
letters on the first page of the contract.’ ” Casarotto, 517 U.S. at 683,
134 L. Ed. 2d at 906, 116 S. Ct. at 1654, quoting Mont. Code Ann.
§27–5–114(4) (1995). The Court had no trouble holding that the state
enactment conflicted with the FAA and was therefore displaced by the
federal law. Casarotto, 517 U.S. at 683, 134 L. Ed. 2d at 906, 116 S.
Ct. at 1654. Casarotto reiterated the principles set forth in Southland
and Perry. It then concluded that the Montana statute was preempted
because it “places arbitration agreements in a class apart from ‘any
contract,’ and singularly limits their validity.” Casarotto, 517 U.S. at
688, 134 L. Ed. 2d at 910, 116 S. Ct. at 1657.
     The Supreme Court most recently addressed FAA preemption in

                                  -11-
Preston. There, the Court held that the FAA allows parties to choose
an arbitral forum to decide their disputes and that the FAA supersedes
any state law that lodges primary jurisdiction in another forum,
whether judicial or administrative. Preston, 552 U.S. at 349-50, 169
L. Ed. 2d at 923, 128 S. Ct. at 981. The parties in Preston had agreed
to arbitrate disputes that might arise under a management contract.
Preston claimed that he was owed fees as a personal manager under
the contract, but Ferrer claimed the contract was void because Preston
was acting as an unlicensed talent agent in violation of a state statute.
Following the procedures prescribed by state law, Ferrer petitioned
the state labor commissioner to decide whether the contract was
enforceable because it violated a law requiring the licensing of talent
agents. Like the Illinois Nursing Home Care Act, the statute at issue
in Preston did not mention arbitration, stating: “In cases of
controversy arising under this chapter, the parties involved shall refer
the matters in dispute to the Labor Commissioner, who shall hear and
determine the same, subject to an appeal within 10 days after
determination, to the superior court where the same shall be heard de
novo.” Preston, 552 U.S. at 355, 169 L. Ed. 2d at 926, 128 S. Ct. at
985, quoting Cal. Lab. Code Ann. §1700.44 (West 2003). The dispute
eventually found its way to state superior court, where Preston moved
to compel arbitration, but the court refused his request because it
believed the FAA did not preempt actions before an administrative
agency with exclusive jurisdiction over the dispute. The California
Court of Appeal affirmed. The Supreme Court of the United States
reversed, stating that the issue was simply “who decides whether
Preston acted as personal manager or as talent agent.” Preston, 552
U.S. at 352, 169 L. Ed. 2d at 925, 128 S. Ct. at 983. The Court found
that the motion to compel arbitration raised solely the question of
which forum would hear the parties’ dispute and that the parties had
not lost any substantive rights under the statute. Preston, 552 U.S. at
359, 169 L. Ed. 2d at 929, 128 S. Ct. at 987. In other words, the
parties had not waived causes of action under the statute; instead, they
had agreed who would decide such issues, and that “who” was an
arbitrator.
    We believe that the antiwaiver provisions of the Nursing Home
Care Act relied upon by the plaintiff are legally indistinguishable from
the provisions struck down by the Supreme Court in Southland, Perry

                                  -12-
and Preston. Here, just like the statutes in Southland and Preston, the
Illinois statute required resolution of the dispute in a non-arbitral
forum. Moreover, neither of the actual statutory provisions invalidated
in Southland and Preston even mention arbitration. The appellate
court erroneously believed that the Nursing Home Care Act had to
specifically “target” or single out arbitration agreements for FAA
preemption to apply. This is a misreading of Perry and Casarotto.
     To be sure Perry and Casarotto do stand for the proposition that
section 2 of the FAA preempts those state laws that “single out”
arbitration agreements for special treatment. Southland and Preston,
however, demonstrate that Perry and Casarotto cannot be read to
stand for the converse proposition that state laws avoid FAA
preemption so long as they do not “single out” arbitration agreements
for special treatment. Instead, Southland and Preston make clear that
state statutes are preempted by the FAA if the statutes as applied
preclude the enforcement of federally protected arbitration rights,
regardless of whether the state statutes specifically target arbitration
agreements. The statutes involved in Southland and Preston did not
single out or target arbitration agreements explicity, as the statute in
Southland required “judicial consideration” of claims brought under
it (Southland, 465 U.S. at 10, 79 L. Ed. 2d at 11, 104 S. Ct. at 858),
and the statute in Preston simply placed jurisdiction of labor disputes
with an administrative agency (Preston, 552 U.S. at 351, 169 L. Ed.
2d at 924, 128 S. Ct. at 982; Cal. Lab. Code Ann. §1700.44 (West
2003)).2
     Similarly, any distinction between the antiwaiver provisions of the
Nursing Home Care Act and the statute at issue in Perry is
inconsequential. Perry, 482 U.S. at 484, 96 L. Ed. 2d at 432, 107 S.

 2
   The State, as intervenor, contends that Preston’s holding was dependent
on the conclusion that another provision within the California statutory
scheme “singled out arbitration for unique restrictions.” The State’s
argument, however, seeks to impose a limitation on Preston that is not
supported by the clear language of that decision. Preston found that both
statutory provisions were preempted by the FAA, giving no indication that
its holding with respect to the first statutory section was dependent on the
Court’s holding with respect to the second statutory section. Preston, 552
U.S. at 356, 169 L. Ed. 2d at 927, 128 S. Ct. at 985.

                                   -13-
Ct. at 2522-23 (providing a judicial forum for labor disputes
“ ‘without regard to the existence of any private agreement to
arbitrate’ ”), quoting Cal. Lab. Code Ann. §229 (West 1971). As the
appellate court in Fosler noted, the California statute in Perry
operated no differently than sections 3–606 and 3–607 of the Nursing
Home Care Act. See Fosler, 391 Ill. App. 3d at 407. With or without
the mention of arbitration, the California statute still guaranteed that
a judicial action for a wage dispute could be maintained. Inclusion of
the “phrase ‘without regard to the existence of any private agreement
to arbitrate’ does not mean that the statute applies only when there is
an agreement to arbitrate.” See Fosler, 391 Ill. App. 3d at 407. Thus,
just like the Illinois provisions, the California statute provided a
plaintiff with a judicial forum regardless of whether the contract
mandated arbitration. See Fosler, 391 Ill. App. 3d at 407.
    The appellate court’s interpretation in the present case also
conflicts with the plain language of section 2 of the FAA, which
permits voiding of an arbitration agreement only on “such grounds as
exist at law or in equity for the revocation of any contract.” 9 U.S.C.
§2 (2000). State laws that are applicable to arbitration contracts and
some other types of contracts, but not all contracts, are not “grounds
*** for the revocation of any contract.” See, e.g., Bradley v. Harris
Research, Inc., 275 F.3d 884, 890 (9th Cir. 2001) (California statute
preempted because it applies only to forum-selection clauses and only
to franchise agreements, and therefore it does not apply to “any
contract”); OPE International LP v. Chet Morrison Contractors, Inc.,
258 F.3d 443, 447 (5th Cir. 2001) (Louisiana statute invalidated
because it conditioned arbitration agreement’s enforceability on a
Louisiana forum, a requirement not applicable to contracts generally);
Doctor’s Associates, Inc. v. Hamilton, 150 F.3d 157, 163 (2d Cir.
1998) (New Jersey case law invalidated because it applied to “one sort
of contract provision (forum selection) in only one type of contract (a
franchise agreement),” and so was preempted by the FAA); KKW
Enterprises, Inc. v. Gloria Jean’s Gourmet Coffees Franchising
Corp., 184 F.3d 42, 50-51 (1st Cir. 1999) (Rhode Island statute was
not a generally applicable contract defense because it applied to only
one type of provision, venue clauses, in one type of agreement,
franchise agreements); see also C. Drahozal, Federal Arbitration Act
Preemption, 79 Ind. L.J. 393, 409 (2004), citing Allied-Bruce, 513

                                 -14-
U.S. at 281, 130 L. Ed. 2d at 769, 115 S. Ct. at 843, citing 9 U.S.C.
§2 (1994). Here, the antiwaiver provisions of the Nursing Home Care
Act purport to invalidate arbitration agreements in a specific type of
contract–those involving nursing care–and for that reason alone they
are not a defense generally applicable to “any contract.”
     The appellate court found it important that “a contract that never
mentions arbitration but instead requires a bench trial *** rather than
a trial by a jury, would be voided by *** sections [3–606 and 3–607]
to the same extent as a contract containing an arbitration agreement.”
381 Ill. App. 3d at 722. But we do not find that this fact requires a
different result. The Illinois enactments at issue are merely pro-judicial
forum legislation that is the “functional equivalent” of antiarbitration
legislation, which is preempted by the FAA and the holding in
Southland. See Fosler, 391 Ill. App. 3d at 407. The California
Supreme Court in Southland held that the antiwaiver provision in that
case precluded the arbitration of disputes under the state statute
(Southland, 465 U.S. at 17, 79 L. Ed. 2d at 15-16, 104 S. Ct. at 861),
but it did not purport to limit the reach of the statute to arbitration
agreements. To the contrary, antiwaiver provisions in such statutes
have been applied in California and elsewhere to invalidate a wide
variety of contract provisions in addition to arbitration clauses. See 79
Ind. L.J. at 409 (collecting cases). Thus, Southland essentially held
that state laws that may apply to more than arbitration clauses are
nonetheless preempted. Application of the “singling out” theory in
such cases would be nothing more than a “backdoor attempt to have
the Supreme Court overrule Southland, which it already has refused
to do.” 79 Ind. L.J. at 410, citing Allied-Bruce, 513 U.S. at 272, 130
L. Ed. 2d at 763, 115 S. Ct. at 838-39.
     Finally, we reject the State’s argument that the FAA should not be
read to preempt state provisions precluding the waiver of jury trials
because the right to a jury trial is a fundamental constitutional right
and jury trial guarantees do not “single out” arbitration clauses for
elimination. There are a number of problems with the State’s
argument. First, we note that it is axiomatic that a party may waive the
right to a trial by jury in a civil case by entering into a contract to
arbitrate. See, e.g., Sherwood v. Marquette Transportation Co., 587
F.3d 841, 842 (7th Cir. 2009), citing Carbajal v. H&R Block Tax
Services, Inc., 372 F.3d 903, 905-06 (7th Cir. 2004). Moreover,

                                  -15-
Illinois public policy favors arbitration as a means of dispute
resolution, generally (710 ILCS 5/2(a) (West 2006)), but sections
3–606 and 3–607 assert a contrary public policy affording nursing
home residents a judicial forum, including the right to a jury trial in a
dispute with a nursing home. As the appellate court in Fosler noted,
the incongruity illustrates why sections 3–606 and 3–607 did not
“ ‘ar[i]se to govern issues concerning the validity, revocability, and
enforceability of contracts generally.’ ” (Emphasis in original.) Fosler,
391 Ill. App. 3d at 409-10, quoting Perry, 482 U.S. at 492 n.9, 96 L.
Ed. 2d at 437 n.9, 107 S. Ct. at 2527 n.9. The State’s argument
ignores the fact that the jury-trial requirement does not apply to all
contracts generally, but only to nursing home contracts. Second, if the
State’s argument were accepted, it would mean that all arbitration
agreements sought to be enforced in Illinois would be invalid, given
that the requirement would have to apply to “all contracts” to avoid
FAA preemption. Such a construction would wholly eviscerate
arbitration agreements and would conflict with and override the
declared federal policy requiring enforcement of arbitration
agreements. By definition arbitration contracts call for an arbitrator,
rather than a jury, to resolve the parties’ dispute. In sum, we simply
do not believe that this is the kind of defense Congress had in mind
when it provided for a defense to preemption based on “grounds as
exist at law or in equity for the revocation of any contract.” 9 U.S.C.
§2 (2000). Rather, the purpose of this savings clause is to preserve
general contract defenses such as lack of mutuality, lack of
consideration, fraud, duress, unconscionability, and the like, that can
truly apply to any contract.

                           CONCLUSION
    For the foregoing reasons, we hold that the public policy behind
the antiwaiver provisions of sections 3–606 and 3–607 of the Nursing
Home Care Act are not “grounds as exist at law or in equity for the
revocation of any contract” within the meaning of section 2 of the
FAA (9 U.S.C. §2 (2000)). The parties raise a number of other issues
before this court, including whether the parties arbitration agreement
evince a transaction “involving [interstate] commerce” within the
meaning of section 2 of the FAA. See 9 U.S.C. §2 (2000). Because
the appellate court erroneously determined that the public policy

                                  -16-
behind the Nursing Home Care Act’s antiwaiver provisions was a
valid, general contract defense to FAA preemption, it did not consider
any other issues in the case. As such, it is appropriate for this court to
remand the cause to the appellate court for consideration and
resolution of the remaining issues. County of Du Page v. Illinois
Labor Relations Board, 231 Ill. 2d 593, 619 (2008); Schwartz, 177
Ill. 2d at 184. Accordingly, we reverse the judgment of the appellate
court and remand the cause to the appellate court for further
proceedings consistent with this opinion.

                                   Appellate court judgment reversed;
                                                     cause remanded.

   JUSTICES FREEMAN and KARMEIER took no part in the
consideration or decision of this case.

                                  -17-