PHILADELPHIA – The Pennsylvania Supreme Court ruled that survival claims brought as part of a wrongful death lawsuit against a nursing facility should be sent to arbitration hearings.
The 4-2 ruling in Taylor v. Extendicare Health Facilities determines survival claims can be brought into arbitration because of the Federal Arbitration Act, which preempts state rules.
Experts say this is part of a nationwide trend that’s forcing state courts to compel arbitration from nearly every case that is subject to arbitration agreements.
“This used to be [state] territory – defining what contracts are valid and invalid is normally the province of state law,” Minneapolis-based attorney Liz Kramer told the Pennsylvania Record. “But because of our federal system, once the U.S. Supreme court makes an interpretation of a federal statute, it is binding on state courts all across our country.”
The suit at the center of this issue was filed by family members of Anna Marie Taylor, who died in 2012. They claim Extendicare was negligent in Taylor’s death, and filed a wrongful death suit. Part of that suit was a survival claim.
A Pennsylvania state court ruled in 2015 that the suit could go forward as a consolidation while Extendicare lawyers argued it should be separated and sent to an arbitrator, per an arbitration agreement between the provider and Taylor’s family. The case headed to the state supreme court to determine whether the case should stay as one unit and be resolved in state court, or whether it could be severed and sent to arbitration.
And, in September, the Pennsylvania Supreme Court determined federal laws overseeing arbitration trumped state rulings.
Pennsylvania Supreme Court Justice David Wecht wrote in an opinion that a 2008 U.S. Supreme Court decision prioritized enforcement of arbitration in part because of the Federal Arbitration Act.
Kramer said these recent rulings have caused ire with some critics. She said opponents say the federal government is taking power away from state courts and forcing arbitration on cases that should be tried in open court.
Arbitration hearings have a unique set of challenges, including higher costs and limited right of appeals. It is also not a public hearing.
“Arbitration is not a public proceeding,” Kramer said. “Even though arbitration can be done by excellent jurists, one thing that state courts don’t like about it is that it’s kind of in the shadows and the public can’t find information about it.”
For a case such as Taylor, Kramer said if any information were to come out during arbitration that shows the healthcare facility was negligent in any way, there would be no way for people researching that facility to find proof.
“It’s private,” she said. “You lose this accountability function of litigation, which is publicly taking someone to task for doing something wrong. That can be an important tool for changing that company's behavior.”