Tuesday, May 16, 2017

Supremes Hold That Arbitration Agreements Must Be Treated Like Any Other Contracts

In Kindred Nursing Home v. Clark, ___U.S.___(May 15,2017), the Supreme Court, once again, treated agreements to arbitrate in a favorable fashion.
At issue was whether an individual with power of attorney, could enter into an arbitration agreement. The Kentucky Supreme Court said no, but the U.S. Supreme Court reversed, reasoning in part:
The Act’s key provision, once again, states that an arbitration agreement must ordinarily be treated as “valid, irrevocable, and enforceable.” 9 U. S. C. §2; see supra, at 4. By its terms, then, the Act cares not only about the “enforce[ment]” of arbitration agreements, but also about their initial “valid[ity]”—that is, about what it takes to enter into them. Or said otherwise: A rule selectively finding arbitration contracts invalid because improperly formed fares no better under the Act than a rule selectively refusing to enforce those agreements once properly made. 
Justice Thomas wrote an interesting dissent where he stated that he would hold that the Federal Arbitration Act does not apply in state courts.

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