In 3 Recent Decisions, Supreme Court of Arkansas Deeply Divided on Arbitration
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The Supreme Court of Arkansas has issued three opinions within the span of four weeks, all on the topic of whether defendants can compel arbitration. Each of the opinions came with a vigorous dissent. The cases offer an interesting look at a state high court that appears to be struggling to deal with FAA case law from SCOTUS; on one hand the court cites recent federal arbitration jurisprudence, but on the other it displays real skepticism about arbitration (at least of consumer disputes) and uses some creativity in its state contract law.
Two of the opinions relate to whether nursing homes can compel arbitration of claims brought by former residents or their estates. In each of those cases, the Supreme Court of Arkansas allowed the nursing home to compel arbitration. First, inCourtyard Gardens Health & Rehabilitation v. Arnold, 2016 Ark. 62 (Feb. 18, 2016), the court held that the agreement’s selection of the National Arbitration Forum (NAF, which no longer administers consumer arbitration) did not make the arbitration agreement impossible to perform, nor was the choice of NAF integral to the agreement. Three justices dissented. [The 11th Circuit just came out the other way on this issue, finding NAF was integral to an arbitration agreement and therefore refusing to compel arbitration in Flagg v. First Premier Bank, 2016 WL 703063 (11th Cir. Feb. 23, 2016).]
Then in GGNSC Holdings v. Lamb, 2016 Ark. 101 (March 10, 2016), the majority compelled arbitration of two nursing home plaintiffs’ claims. Again, the court held that the unavailability of the NAF did not make the arbitration agreement impossible to perform. It also held that the arbitration agreement was not unconscionable. Two justices “strongly” dissented:
The majority’s opinion in this case goes far beyond resolving any doubts in favor of arbitration. It rubber-stamps the arbitration agreements before it based simply on our policy favoring arbitration. This begs the question: Going forward, could there ever be an arbitration agreement the majority determines to be invalid or unenforceable? If today’s decision is any indication, the answer to that question is no.
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