Marmet Health Care Center, Inc. v. Brown: Another Lesson in the FAA's Preemption

22 February 2012 Wisconsin Appellate Law Blog
Author(s): Eric G. Pearson

Ignoring established precedent from a superior tribunal is one way for a court to earn a sharp rebuke from a higher court. And that is precisely what happened in a consolidated decision today in Marmet Health Care Center, Inc. v. Brown, No. 11-391, and in Clarksburg Nursing Home & Rehabilitation Center LLC v. Marchio, No. 11-394, where the Supreme Court of the United States granted writs of certiorari to the Supreme Court of Appeals of West Virginia, vacated that court’s judgments, and remanded for further proceedings — a practice known as a “GVR,” drawn from the first letter of the three words “grant,” “vacate,” and “remand.”

At issue in those cases was whether the Federal Arbitration Act preempted what the West Virginia court held was the state’s public policy of not enforcing arbitration clauses signed before an act of negligence that resulted in personal injury or wrongful death. The Court’s five-page answer was a flat “yes,” since it had reaffirmed the FAA’s superiority as recently as last Term in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011). Not helping matters was the West Virginia court’s choice of words to describe the Supreme Court’s FAA jurisprudence: “Tendentious” and “created from whole cloth” weren’t exactly flattering.

Followers of Wisconsin’s appellate courts will no doubt recognize that Wisconsin’s court of appeals ran afoul of the same rule last year. The case was Cottonwood Financial, Ltd. v. Estes, and it involved the unconscionability of an arbitration clause that waived a right to classwide proceedings. Luckily for that court, Wisconsin’s Supreme Court intervened, GVRing the lower court’s decision in light of Concepcion. The hint wasn’t lost on anyone:  Wisconsin’s court of appeals reversed course in January of this year and avoided a similar gaffe.  No. 2009 AP 760 (Jan. 31, 2012).

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