The U.S. Supreme Court has rebuffed a West Virginia court’s attempt to carve out an exception to the Federal Arbitration Act (FAA).
In a per curiam opinion, the Court held in Marmet Health Care Center v. Brown that the FAA trumps state law, including a state’s public policy against pre-dispute arbitration agreements.
At issue in Marmet was a series of agreements to arbitrate in nursing home admission contracts. The family members who signed the agreements on behalf of the patients sued after the patients died.
West Virginia’s highest court held that such agreements, signed before any acts of negligence, violate public policy. The U.S. Supreme Court disagreed, holding that the State’s decision was “both incorrect and inconsistent with clear instruction in the precedents of [the] Court.”
A state law cannot prohibit parties from agreeing to arbitrate a particular type a claim, the Court held.
The text of the ruling can be found here.
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