Kindred Nursing Centers Ltd. v. Clark (16-32)
argument 16-32Kindred Nursing Centers Ltd. v. Clark
Supreme Court of the United States
1h 0m
5 speakers
8 chapters
transcribed 5 days ago
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What is the central legal question about the Federal Arbitration Act and Kentucky’s arbitration rule?
We'll hear argument today in case sixteen thirty two, Kindred Nursing Centers versus Clark.
Mr
Pincus?
Thank you, Mr. Chief Justice, and may it please the court. To determine whether a a power of attorney confers authority to enter into an arbitration agreement, Kentucky applies a rule different and more demanding than the rule for determining whether a power of attorney confers authority to enter into contracts generally. Question in this case is whether the Federal Arbitration Act precludes Kentucky from erecting the special arbitration obstacle to enforcing arbitration agreements signed by an attorney in fact. To ask that question we believe is to answer it. That's the very reason that Congress enacted the FAA to prevent discriminatory rules targeting arbitration agreements. But suppose Kentucky had a statute providing that an attorney in fact
lacks authority to do uh a a number of things. Convey real property, uh move the principal's residents out of state. uh invest in foreign uh real estate. Uh with a few more examples like that. or assign an arbitration clause. uh arbitration contract. Um The the a at that's not this statute, I know. But at at at some point can arbitration clauses be inc included in a in a list of items that must be given. At some point they can, Your Honor. And I think the dividing line, the statute, of course, refers to rules that apply to any contract. This Court has talked about contracts generally. We don't think that means that the rule has to apply to every single contract, no matter what. If the rule takes its meaning from a characteristic other than arbitration, to give an example, if a st if a state had a law
law that said all consumer contracts have to be in at least ten point type. Surely the court the state could apply that law to an arbitration agreement associated with a consumer contract. The problem obviously arises, uh, if there's some gerrymandering, uh that puts arbitration in a special category. And and we think the rule here fails uh for several reasons. Uh one of which is um even the categories that the State Court said it was erecting really don't hold up uh based on the objective evidence. But Also, more importantly, the reason that arbitration was included in this category is the very reason that the FAA forbids, which is the conclusion by the State that arbitration is an an arbitration contract is especially onerous and therefore should be classed with other especially onerous contracts.
That's exactly what the FAA was designed to prevent. So that's the the problem here.
So how about a different example, but re more related in my mind right now. Uh under Kentucky law, let's say, the power of attorney requirements are strictly construed. That was one of the principles that the Court below used to interpret at least one of the contracts. And as a general matter, it states that the state requires express consent to confer power to waive any fundamental constitutional right. Would this general principle be preempted by the FFE? A by the FAA.
Well, let me distinguish between those those two general principles, Your Honor, if I may. I think a principle of strict construction, fairly applied, across a a a wide category of contracts, probably is something In other words, if it applied to all powers of attorney, probably is something that would pass muster under the FAA, again recognizing that a court would have to take care that that, notwithstanding the general rule, there wasn't some uh discrimination in fact against arbitration. I think the question about uh a fundamental rights uh line uh Let me answer that in two ways. First of all, in this case, we don't believe that that's in fact what happened, because we think there are a number of fundamental rights that are not categorized in the group that the State Court mentioned.
And in fact, what the State Court did was identify four or five especially onerous examples of intrusion on fundamental rights and say they these are all like arbitration. It didn't say all fundamental rights. For example, forum selection clauses may waive due process rights.
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Chapters
8 chapters
1
What is the central legal question about the Federal Arbitration Act and Kentucky’s arbitration rule?
0:00–8:34
2
How does Kentucky’s strict construction rule for powers of attorney affect arbitration agreements?
8:34–17:48
3
Why do the parties argue that arbitration agreements should not be treated as especially onerous contracts?
17:48–25:31
4
What examples illustrate the difference between arbitration clauses and other fundamental‑right waivers?
25:31–31:00
5
How do the Wellner and Ping cases influence the interpretation of arbitration authority under a power of attorney?
31:00–37:32
6
What is the Supreme Court’s stance on preempting state rules that single out arbitration under the FAA?
37:32–45:07
7
How might a state statute that restricts arbitration agreements violate the Federal Arbitration Act?
45:07–52:33
8
What conclusions does the Court reach about the enforceability of the arbitration clause in Kindred Nursing Centers v. Clark?
52:33–1:00:18