Kindred Nursing Centers Limited Partnership v. Clark

Case Updates

The Supreme Court struck down a rule applied by Kentucky courts that a power of attorney does not allow an agent to enter into a contract to arbitrate unless the power of attorney agreement expressly mentions arbitration. The Court held that Kentucky’s rule was preempted by the FAA because there was no evidence that Kentucky courts applied the same clear statement requirement to other contract terms besides arbitration. Rather, the rule “single[d] out arbitration agreements for disfavored treatment,” which violated the FAA’s requirement that courts enforce arbitration agreements under the same rules that apply to contracts generally. Although the decision was simply an application of well-settled law, it is helpful confirmation that the Court will continue to police state courts that invent new tests to give effect to their hostility to arbitration.

The U.S. Chamber filed an amicus brief on the merits of a Kentucky Supreme Court decision holding that the authority to enter into an arbitration agreement cannot be inferred from a general power of attorney. The brief urged the Supreme Court to reverse the decision, arguing that the liberal federal policy favoring arbitration reflects that arbitration is a fair, efficient, and inexpensive alternative to litigation, which benefits both business and individuals.

Thomas R. McCarthy and Cameron T. Norris of Consovoy McCarthy Park PLLC served as counsel for the U.S. Chamber of Commerce on behalf of the U.S. Chamber Litigation Center.