Kindred Nursing Centers, et al. v. Clark, et al.

Whether the Federal Arbitration Act preempts a Kentucky contract rule that requires a power of attorney to expressly refer to arbitration agreements, despite containing a broad power to contract, in order to authorize the attorney-in-fact to enter into arbitration agreements on the principal's behalf?

Respondents, two nursing home residents initiated this action by bringing personal injury claims against Petitioners, several nursing homes. Prior to being admitted, the attorney-in-facts for each Respondent signed an instrument that subjected any claims arising from the resident-nursing home relationship to arbitration. When each Respondent filed a complaint in the circuit courts, Petitioners responded with motions to dismiss. The circuit courts denied the motions on the grounds that attorney-in-fact instruments did not authorize the attorney-in-facts to waive the principal's right to bring claims in the circuit court. Petitioners then filed interlocutory appeals with the Kentucky Court of Appeals, which affirmed the circuit court. The Petitioners then appealed to the Supreme Court of Kentucky which also affirmed the trial court, holding that attorney-in-fact was not authorized to enter into the arbitration agreements, because none of the power of attorney instruments expressly manifested the principals intent to convey the power to waive the right to a jury trial and that their assent to the arbitration agreement was not validly obtained. On appeal to the Supreme Court, Petitioners argue that the Federal Arbitration Act preempts the Kentucky contract rule requiring a power of attorney instrument to expressly mention arbitration agreements before the power to bind the principal to an arbitration agreement is conferred. Petitioners argue that the Supreme Court of Kentucky's decision violates the Supreme Court's holding that "preclude[s] States from singling out arbitration provisions for suspect status" by requiring an express reference to arbitration agreements separate and apart from the broad power to contract give in a power of attorney.