Federal Arbitration Act—Preemption of State Law
Kindred Nursing Centers Limited Partnership v. Clark, No. 16-32
In refusing to enforce arbitration agreements between two nursing homes and their residents, the Kentucky Supreme Court held, by a 4-3 vote, that a family member who has been given a power of attorney lacks the authority to sign an arbitration agreement on behalf of her principal unless the power of attorney expressly refers to arbitration agreements. Kentucky law does not require such express authorization for any other type of contract. The Federal Arbitration Act provides that arbitration agreements “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 (emphasis added). The Court granted certiorari in Kindred to decide whether the Federal Arbitration Act preempts this Kentucky state-law rule limiting the effectiveness of powers of attorney on the ground that it discriminates against arbitration.