SCOTUS delivers another blow to consumers
The Supreme Court has declined to review a Texas court’s ruling on a case involving arbitration of a nursing home wrongful death lawsuit. The case, Perez v. The Fredericksburg Care Co., was brought against the Fredericksburg Care Co. of San Antonio, TX, by the survivors of Elisa Zapata, who was a resident at a Fredericksburg facility. The plaintiffs claimed Zapata’s death came as a result of the staff’s negligent care.
“The facility moved to compel arbitration because of a clause in the admission’s agreement. The family argued that the agreement was void because it did not comply with a provision of the Texas Medical Act (TMA) which requires agreements to contain “10-point boldface type clearly and conspicuously stating” a consumer warning. The trial and appeals court sided with the family in denying a motion by the facility to compel arbitration, citing the 1944 McCarran-Ferguson Act. The McCarran-Ferguson Act does not allow state arbitration agreements to be preempted by federal law. The Texas Supreme Court overturned the appeals court. The Texas Supreme Court held that the Federal Arbitration Act preempts both the TMA and the McCarran-Ferguson Act ruling that arbitration could proceed,” according to legalreader.com.
While the Texas Supreme Court’s ruling wouldn’t be relied upon in settling arbitration disputes outside of the state, several other state high courts have followed Texas’ lead on arbitration cases in the past, Bloomberg BNA reported.
Critics of arbitration have stated that it is difficult for those placing a loved one in a nursing home, or for the patient, to fully understand the clause they sign during a time of high stress and anxiety. Some, they claim, may not even be aware that they had signed an arbitration clause.
As the Consumer Financial Protection Bureau shines the light on arbitration clauses, it’s expected that there will be more changes to the way arbitration clauses are handled.