A nursing facility resident and California Advocates for Nursing Home Reform (CANHR) sought to intervene in a case brought by nursing facilities to challenge a state law that restricts the use of arbitration in nursing home contracts.
AARP Foundation Litigation attorneys represented CANHR and nursing facility resident Craig Patrick in their efforts to intervene as defendants in a lawsuit pending in the U. S. District Court for Eastern California. The court refused the request that these clients join as parties to the lawsuit but agreed that they can participate by filing a brief as friends of the court.
The lawsuit was brought by six nursing home facilities and the nursing facility trade association to overturn California’s statutory protections – which AARP California strongly supported during the legislative process – on the grounds that they run afoul of the Federal Arbitration Act (FAA).
The nursing home facilities claim that the law and its regulations are preempted by federal law and are unenforceable. The challenged California law makes it illegal for a nursing facility to require nursing facility residents to arbitrate violations of their enumerated rights under the Patient Bill of Rights. The Patient Bill of Rights can be enforced by a statute that allows for private citizens to sue a facility that violates those rights and seek damages as well as a court order to change the illegal behavior. That court ordered remedy impacts all of the residents of the facility and would not be available if the conflict is only resolved through arbitration. If the industry is successful in its challenge, the protections in the law will be dramatically diminished and residents will have a very hard time finding lawyers who are willing to take their cases.
Arbitration is a dispute resolution mechanism designed for business-to-business transactions and it does not provide the same public scrutiny, right to a jury trial, right to access evidence, adherence to precedence and other procedural protections lawsuits provide; it can also be significantly more expensive. Despite its original design for business-to-business disputes – where the parties have similar sophistication, access to resources, access to legal assistance, and similar bargaining power – arbitration clauses are becoming increasingly common in everyday transactions for ordinary people, including credit card, cell phone, and employment contracts as well as nursing facility admission contracts.
Moreover, mandatory arbitration is particularly problematic in the context of nursing facility admissions. By its very nature a nursing facility admission almost always represents a time of crisis for the person being admitted and his/her family.
What’s at Stake
This case directly implicates the rights and obligations of nursing facility residents and their families in California, and will also be watched closely by legislatures and courts in other states.
Valley View Health Care v. Chapman is before the U.S. District Court for the Eastern District of California. AFL co counseled with the firms of Kreindler & Kreindler, Lieff Cabraser Heimann & Bernstein, and Janssen Malloy, LLP. They will file a friend-of-the-court brief at the appropriate time.