Illinois Supreme Court issues an opinion on Federal Arbitration Act
04/23/2010
On April 15, 2010, the Illinois Supreme Court issued an opinion providing that the portions of the Federal Arbitration Act which uphold terms of a contract mandating arbitration preempted the conflicting Illinois Nursing Home Care Act provisions deeming any agreement of a nursing home resident to enter into arbitration as null and void. Carter v. SSC Odin Operating Company, 2010 WL 1493626, Ill., (NO. 106511)
The administrator of a deceased resident's estate ("Resident's Estate"), in Carter v. Odin, filed wrongful death and survival actions against the defendant nursing home ("Nursing Home") arising from alleged violations of the Nursing Home Care Act. Nursing Home filed a Motion to Compel Arbitration based on (1) an agreement between Nursing Home and Resident's Estate entered into before the resident was admitted to Nursing Home in which the parties agreed to settle all disputes through binding arbitration, and (2) the Federal Arbitration Act's provisions[1] that uphold parties agreements to arbitrate. Resident's Estate argued that the Illinois Nursing Home Act's "antiwaiver" provisions[2] entitled her to a trial by jury because the legislation renders null and void any resident's waiver of her right to bring litigation pursuant to the Illinois Nursing Home Act. The Circuit Court agreed with Resident's Estate and found, inter alia, that the contract's arbitration provision was unenforceable pursuant to the Illinois Home Care Nursing Act. The Appellate Court affirmed on similar grounds.
The Illinois Supreme Court heard this issue on interlocutory appeal and reversed the Appellate Court by finding that the aforesaid provisions of the Illinois Nursing Home Act are in direct conflict with the Federal Arbitration Act and that, pursuant to the Supremacy Clause of the United States Constitution (Article IV), the Federal Arbitration Act governs. Therefore, the Illinois Supreme Court held that the Illinois Nursing Home Act's "antiwaiver" provisions did not render the parties' agreement to arbitrate as null and void, and remanded the matter back to the appellate court to decide upon a number of remaining issues relative to the Motion to Compel.
For copies of Carter v. SSC Odin Operating Company, 2010 WL 1493626, Ill., (NO. 106511), please e-mail Bill Ragen at William.Ragen@arandpartners.com.
[1] The relevant portion of the FAA provides as follows:
"A written provision in *** a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, *** shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2 (2010).
[2] The relevant portions of the Illinois Nursing Home Care Act provide as follows: "Any waiver by a resident or his legal representative of the right to commence an action under Sections 3-601 trough 3-607, whether oral or in writing, shall be null and void, and without legal force or effect." 210 ILCS 45/3-606 (West 2009); and "Any party to an action brought under Sections 3-601 through 3-607 shall be entitled to a trial by jury and any waiver of the right to a trial by a jury, whether oral or in writing, prior to commencement of an action, shall be null and void, and without legal force or effect." 210 ILCS 45/3-607 (West 2009).
