Reverse Pre-Empting the Federal Arbitration Act: Alleviating the Arbitration Crisis in Nursing Homes

By Pavlic, Jana | Journal of Law and Health, Summer 2009 | Go to article overview

Reverse Pre-Empting the Federal Arbitration Act: Alleviating the Arbitration Crisis in Nursing Homes


Pavlic, Jana, Journal of Law and Health


   I. INTRODUCTION
  II. HISTORY & LEGISLATION
 III. SUPREME COURT DECISIONS INTERPRETING THE FAA
  IV. THE AFTERMATH OF PREEMPTION: UNREGULATED
      ARBITRATION IN NURSING HOMES
      A. Unregulated Arbitration in Nursing Homes
         Creates a Multifaceted System of Deterrence
         1. Procedural Unconscionability
         2. Substantive Unconscionability
         3. Prohibitive Costs
         4. Slanted Outcomes
      B. The Deterrent Effects of Arbitration are
         Magnified in Nursing Homes
         1. The Typical Claimant
         2. The Typical Claim
   V. THE FUTURE PLIGHT OF NURSING HOME RESIDENTS
  VI. PROPOSED LEGISLATION: A PARALLEL TO
      THE MCCARRAN ACT
      A. Congress Should Consent to State Regulation
 VII. PROPOSED GUIDELINES FOR STATES
VIII. CONCLUSION

I. INTRODUCTION

In 1925, Congress enacted the Federal Arbitration Act (FAA), (2) which codified the enforceability of arbitration agreements (3) in expansive, wholesale language. (4) "The Federal Arbitration Act rests on the authority of Congress to enact substantive rules under the Commerce Clause." (5) The FAA provides that "a contract evidencing a transaction involving commerce to settle by arbitration a controversy ... arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." (6) In a series of later cases, the United States Supreme Court interpreted the FAA's broad rule of enforceability as applying to both consumers and merchants in federal and state courts. (7) Most recently in Doctor's Associates, Inc. v. Casarotto, (8) the Court held that states were preempted from enacting substantive legislation regarding arbitration, and that even legislation concerning a simple notice requirement (9) would be invalidated as conflicting with the "goals and policies" of the FAA. (10)

By preempting the states from regulating certain aspects of arbitration, specifically the process associated with agreeing to arbitration, the Court has left a gaping hole of unregulated territory in this alternative adjudicatory forum. (11) The Court's acquiescence and restrictions on state legislation, although once intended to "make arbitration agreements as enforceable as other contracts," (12) has "elevate[d] arbitration provisions [to a standing] above all other contractual provisions." (13) The consequence is that state legislatures are foreclosed from enacting even minimal safeguards to protect unwary consumers, and courts can only cure unconscionable arbitration agreements on a case-by-case basis.

In nursing homes, preemption has created an arbitration crisis, (14) whereby potential residents are passively compelled to sign contracts that contain binding, pre-dispute arbitration clauses as a condition of being admitted to the facility. This unregulated process is wrought with insurmountable obstacles (15) which collectively deter residents from obtaining redress in either a court of law or the arbitral forum. (16) Federal legislation is essential to restore fundamental principles of contract law (17) and fairness to nursing home admission agreements which, due to the lack of regulation, have been abandoned in favor of "administrative convenience." (18)

Section II provides a brief history of arbitration in consumer contracts, and the development of federal and state legislation condoning the practice of arbitrating consumer disputes. Section III analyzes United States Supreme Court decisions that have interpreted the FAA to preempt state legislation regarding arbitration. Section IV discusses the aftermath of preemption and unregulated arbitration in nursing homes. Section V considers the future plight of nursing home residents if the system is permitted to continue without regulation. Section VI of this Note proposes a solution to alleviate the arbitration crisis in nursing homes that will maintain the viability of arbitration as an alternative to litigation. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Reverse Pre-Empting the Federal Arbitration Act: Alleviating the Arbitration Crisis in Nursing Homes
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.